THALES (EPA:HO) - Thales - Order intake and sales at 30 September 2018 - Press release
Transparency directive : regulatory news
18/10/2018 07:00
Click here to download pdf version
PRESS RELEASE18 October 2018
Paris La Défense, France
Order intake and sales at 30 September 2018
* Solid order intake: EUR9.5 billion, up 7%(1) (up +9% on an organic basis(2))
* Sales: EUR10.9 billion, up 6.2% (up +7.9% on an organic basis)
* Confirmation of all 2018 financial objectives - expected organic sales growth
and EBIT(3) at the top end of the ranges set in March 2018
Thales (Euronext Paris: HO) announced today its order intake and sales for the
period ending 30 September 2018.
Order intake
(in EUR millions) 9m 2018 9m 2017 9m 2017 Total Organic
restated reported change change
for IFRS 15
Aerospace 3,044 3,082 3,049 -1% +1%
Transport 1,267 976 976 +30% +32%
Defence & Security 5,132 4,750 4,766 +8% +10%
Other 24 42 42
Total 9,468 8,849 8,833 +7% +9%
Sales (in EUR millions)
Aerospace 4,010 3,930 4,068 +2.0% +3.4%
Transport 1,373 1,156 1,060 +18.7% +21.1%
Defence & Security 5,450 5,106 5,163 +6.7% +8.4%
Other 40 43 45
Total 10,873 10,236 10,336 +6.2% +7.9%
Of which mature
markets (4) 7,659 7,182 7,103 +6.6% +8.2%
Of which emerging
markets(4) 3,215 3,054 3,233 +5.3% +7.2%
"Over the first nine months of the year, Thales confirmed its growth momentum,
with increased business across all segments and geographic regions. Order
intake is in line with our expectations, while organic sales growth of some 8%
is substantially ahead of our full year target.
(1) Since 1 January 2018, the Group has been applying IFRS 15 "Revenue from
Contracts with Customers". All changes in this press release are calculated
compared with the figures restated for the application of this standard
(2) In this press release, "organic" means "at constant scope and currency".
See note on methodology on page 9 of the 2017 registration document, and
calculation on page 8 of this press release
(3) Non-GAAP financial indicator, see definition on page 8 of the 2017
registration document
(4) Mature markets: Europe, North America, Australia, New Zealand. Emerging
markets: all other countries. See table on page 7
The solid performance over the first 3 quarters of the year increases our
confidence in Thales's ability to meet its full year objectives. As a result,
we now expect to hit the top end of the ranges announced last March, both in
terms of organic growth and EBIT.
Thanks to the efforts of its employees around the globe, Thales reinforces its
leadership position in its 5 end markets and strengthens its highly
value-creative profitable growth model."
Patrice Caine, Chairman and Chief Executive Officer
Order intake
In the first nine months of 2018, order intake stood at EUR9,468 million, up 7%
compared with 9m 2017 (+9% at constant scope and currency).
Over this period, Thales secured 10 large orders with a unit value of over
EUR100 million:
* 3 large orders recorded in Q1 2018, covering the modernisation of air
traffic control in Australia (OneSKY project), the supply of systems onboard
the 12 additional Rafale combat aircraft ordered by Qatar, and the renovation
of signalling systems on one of the main railways in Poland;
* 3 large orders recorded in Q2 2018, covering the design of a new-generation
very high throughput satellite for Eutelsat (Konnect VHTS), the supply to the
German Navy, in a consortium with Atlas Elektronik, of the combat management
system (CMS) for 5 K130 corvettes, and the modernisation of sonar systems
equipping the Australian Royal Navy's Collins class submarines;
* 4 large orders booked in Q3 2018:
o An amendment to the construction contract for 6 "Meteosat Third
Generation" meteorological observation satellites, for ESA and EUMETSAT
o Extension of the contract to provide the radio network for the London
Underground ("Connect" system)
o A new tranche of the CONTACT project, the largest military
software-defined radio programme in Europe
o Extension of a service contract covering the British Army's air defence
equipment (Adapt Project)
At EUR7,046 million, orders with a unit value of less than EUR100 million were
stable compared to 9m 2017, with the acceleration of order intake in Q3
offsetting, as expected, the decline seen in H1.
From a geographical point of view(5), order intake benefited from strong growth
in mature markets (EUR7,644 million, +18%), led by all large regions, with the
drop in orders in France reflecting a high basis of comparison. This momentum
offset the slowdown in order intake in emerging markets (EUR1,823 million,
-23%).
Order intake in the Aerospace segment was stable (-1%) at EUR3,044 million
compared with EUR3,082 million for 9m 2017, benefiting from a low basis of
comparison in Q3, particularly in Space.
At EUR1,267 million, order intake in the Transport segment was particularly
brisk, up 30% compared to 9m 2017. Following several successes in H1 2018 in
mainline signalling (Poland, Norway), this segment benefited in Q3 from the
extension of a contract with London Underground and the signing, in partnership
with Siemens, of a signalling contract for the future lines 15, 16 and 17 of
the Grand Paris Express, Europe's largest urban transport project.
Order intake in the Defence & Security segment amounted to EUR5,132 million, up
8% from EUR4,750 million in 9m 2017, notably with good momentum in equipment
for military ships and submarines, military radio communications, air traffic
control (with the OneSKY project), and cybersecurity.
Sales
Sales for 9m 2018 stood at EUR10,873 million, compared to EUR10,236 million
over the same period in 2017, up 6.2%. The organic change (at constant scope
and currency(6)) came in at +7.9%, driven by strong momentum in the Transport
and Defence & Security segments.
From a geographical(7) perspective, this performance reflected solid growth in
both emerging (up +7.2%) and mature markets (up +8.2%).
Sales in the Aerospace segment totalled EUR4,010 million, a 2.0% increase
compared with 9m 2017 (+3.4% at constant scope and currency). This limited
growth reflects the slowdown of the commercial telecom satellite market, along
with a high basis of comparison in In-Flight Entertainment. The stronger growth
in Q3 was driven by Q3/Q4 phasing effects.
(5) See table on page 7
(6) The calculation of the organic change in sales is shown on page 8
(7) See table on page 7
In the Transport segment, sales came in at EUR1,373 million, up 18.7% compared
with 9m 2017 (up +21.1% at constant scope and currency). The segment benefited
from the ramp-up of the large urban rail signalling contracts signed in 2015
and 2016, combined with an upturn in mainline activity. However, growth in this
segment is expected to slow down significantly during Q4, with the basis of
comparison becoming less favourable.
Sales in the Defence & Security segment stood at EUR5,450 million, up 6.7%
compared with 9m 2017 (up +8.4% at constant scope and currency). This segment
continued to benefit from broad- based growth, particularly driven by surface
radars, combat aircraft systems, systems and services for military ships and
submarines, military radio communications, and cybersecurity.
Update on the projected acquisition of Gemalto
On 17 December 2017, Thales and Gemalto (Euronext Amsterdam and Paris: GTO)
announced the signing of a merger agreement including an all-cash offer for all
issued and outstanding ordinary shares of Gemalto, for a price of EUR51 per
share cum dividend(8). This offer was unanimously recommended by Gemalto's
Board of Directors.
The proposed merger is progressing satisfactorily. 7 of the required 14
regulatory clearances have already been obtained, and the steps to obtain the
remaining 7 are well advanced(9).
Thales and Gemalto are discussing with certain antitrust authorities on remedy
proposals to address their concerns with respect to the General Purpose
Hardware Security Modules (GP HSM) market.
As a consequence, Thales and Gemalto now expect to close the offer in Q1 2019,
once all the regulatory authorisations have been obtained.
Outlook(10)
The sound performance seen over the first nine months of the year is leading
the Group to adjust its 2018 objectives in terms of organic sales growth and
EBIT.
In 2018, Thales should continue to benefit from positive trends in the majority
of its markets. The acceleration of commercial momentum in the defence
businesses should offset the slowdown of the telecom satellite market. In this
context, 2018 order intake is expected to be around EUR15.5 billion.
(8) Valuing the equity capital of Gemalto at approximately EUR4.8 billion
(9) Regulatory authorisations still to be obtained: 6 antitrust authorisations
(Australia, European Union, Mexico, New Zealand, Russia, United States), 1
regulatory authorisation relating to foreign investments (Russia)
(10) As of 1st January 2018, the Group has been applying IFRS 15 "Revenue from
Contracts with Customers". To provide a basis for understanding the 2018
financial objectives, the 2017 results restated to reflect the application of
this standard are presented on page 20 of the 2017 full year results press
release published on 6 March 2018.
In spite of more moderate growth in the aerospace segment, sales should see
organic growth at the top end of the range announced last March, which was
between +4% and +5% compared to 2017 sales restated for the application of IFRS
15 (EUR15,228 million).
The Group will continue to increase its R&D investments, particularly in
digital technologies. The self-funded R&D expenses should therefore increase by
around 10% compared to 2017.
The growth in sales, combined with the impact of the Ambition 10 strategy on
product competitiveness and differentiation, should result in Thales delivering
an EBIT in 2018 at the top end of the range announced last March, which was
between EUR1,620 and EUR1,660 million (based on February 2018 scope and
exchange rates), representing an increase of 19% to 22% compared to 2017 EBIT
restated for the application of the IFRS 15 standard (EUR1,365 million).
Over the 2018-2021 period, Thales has set the following medium-term targets:
* organic sales growth(11) of +3% to +5% on average over the 2018-2021 period,
with each operating segment expected to outperform its market;
* an EBIT margin of 11% and 11.5% by 2021, resulting from a 200 to 240 basis
point improvement(12) related to competitiveness initiatives, partly
reinvested in self-funded R&D, representing approximately 50 to 100 basis
points(12).
These financial targets do not take into account the potential impact of the
projected acquisition of Gemalto. The Group may need to update them depending
on the effective conclusion date of this transaction.
This press release may contain forward-looking statements. Such forward-looking
statements represent trends or objectives, and cannot be construed as
constituting forecasts regarding the Company's results or any other performance
indicator. Actual results may differ significantly from the forward-looking
statements due to various risks and uncertainties, as described in the
Company's Registration Document, which has been filed with the French financial
markets authority (Autorité des marchés financiers - AMF).
This press release does not constitute an offer, or any solicitation of any
offer, to buy or subscribe for any securities in Gemalto. Any offer is only
made by means of the Offer Document, which is available since 27 March 2018.
This press release is for information purposes only and does not constitute a
prospectus or an offer to sell or the solicitation of an offer to buy any
security in the United States of America or in any other jurisdiction.
Securities may not be offered or sold in the United States of America absent
registration or an exemption from registration under the U.S. Securities Act of
1933, as amended (the "Securities Act"). Securities that are the subject of any
transaction mentioned in this press release have not been and will not be
registered under the Securities Act and there is no intention to make a public
offering of such securities in the United States.
(11) Compared to 2017 pro forma IFRS 15 sales (EUR15,228m)
(12) Compared to the EBIT margin (9.8%) and the level of self-funded R&D (5.0%)
on the 2017 income statement
In this press release, amounts expressed in millions of euros are rounded to
the nearest million. As a result, the sums of the rounded amounts may differ
very slightly from the reported totals. All ratios and changes are calculated
based on underlying amounts.
About Thales
The people who make the world go round - they rely on Thales. Our customers
come to us with big ambitions: to make life better, to keep us safer.
Combining a unique diversity of expertise, talents and cultures, our architects
design and deliver extraordinary high technology solutions. Solutions that make
tomorrow possible, today. From the bottom of the oceans to the depths of space
and cyberspace, we help our customers think smarter and act faster, mastering
ever greater complexity at every decisive moment along the way.
Thanks to its 65,000 employees in 56 countries, Thales recorded sales of
EUR15.8 billion in 2017.
CONTACTS
Thales, Media Relations
Group & Innovation
Victoire Chartier
+33 (0)1 57 77 90 22
victoire.chartier@thalesgroup.com
Thales, Analysts/Investors
Bertrand Delcaire
+33 (0)1 57 77 89 02
ir@thalesgroup.com
FIND OUT MORE
Thales Group
Download photos
Order intake by destination - 9 months 2018
(in EUR millions) 9m 2018 9m 2017 9m 2017 Total change Organic
restated reported change
for IFRS 15
France 2,614 2,823 2,899 -7% -7%
United Kingdom 568 545 545 +4% +5%
Rest of Europe 2,112 1,737 1,737 +22% +22%
Sub-total Europe 5,294 5,105 5,181 +4% +4%
United States and
Canada 1,004 900 912 +12% +17%
Australia and New
Zealand 1,346 472 472 +185% +208%
Total mature markets 7,644 6,478 6,565 +18% +20%
Asia 971 1,242 1,175 -22% -20%
Middle East 571 705 696 -19% -18%
Rest of the world 281 426 397 -34% -32%
Total emerging
markets 1,823 2,372 2,268 -23% -21%
Total all markets 9,468 8,849 8,833 +7% +9%
9m 2018 weighting
in %
28%
6%
22%
56%
11%
14%
81%
10%
6%
3%
19%
100%
Sales by destination - 9 months 2018
(in EUR millions) 9m 2018 9m 2017 9m 2017 Total change Organic
restated reported change
for IFRS 15
France 2,843 2,578 2,517 +10.3% +10.7%
United Kingdom 916 918 907 -0.3% +0.9%
Rest of Europe 2,266 2,155 2,086 +5.1% +5.6%
Sub-total Europe 6,024 5,652 5,511 +6.6% +7.2%
United States and
Canada 998 923 967 +8.2% +11.2%
Australia and New
Zealand 636 608 625 +4.7% +13.2%
Total mature markets 7,659 7,182 7,103 +6.6% +8.2%
Asia 1,486 1,460 1,501 +1.8% +3.5%
Middle East 1,093 1,016 1,079 +7.5% +9.5%
Rest of the world 636 578 653 +10.0% +12.3%
Total emerging
markets 3,215 3,054 3,233 +5.3% +7.2%
Total all markets 10,873 10,236 10,336 +6.2% +7.9%
9m 2018 weighting in %
26%
8%
21%
55%
9%
6%
70%
14%
10%
6%
30%
100%
Order intake and sales - Q3 2018
Order intake
(in EUR millions) Q3 2018 Q3 2017 Q3 2017 Total Organic change
restated reported change
for IFRS 15
Aerospace 1,002 808 812 +24% +22%
Transport 433 314 314 +38% +39%
Defence & Security 1,699 1,715 1,731 -1% +0%
Total - operating
segments 3,133 2,837 2,857 +10% +11%
Other 4 4 4
Total 3,137 2,841 2,861 +10% +11%
Sales(in EUR millions)
Aerospace 1,242 1,134 1,197 +9.6% +8.8%
Transport 469 395 349 +18.6% +19.2%
Defence & Security 1,694 1,574 1,532 +7.6% +8.3%
Total - operating
segments 3,404 3,102 3,077 +9.7% +9.9%
Other 17 15 18
Total 3,421 3,117 3,095 +9.7% +9.9%
Organic change in sales by quarter
In EUR millions
2017 sales Currency Impact of 2018 Impact of Total Organic
restated impact disposals sales acquisitions change change
for IFRS 15
Q1 3,278 -94 -9 3,412 8 +4.1% +7.2%
Q2 3,841 -53 -5 4,040 4 +5.2% +6.7%
H1 7,118 -147 -14 7,452 12 +4.7% +6.9%
Q3 3,117 -8 0 3,421 3 +9.7% +9.9%
9m 10,236 -155 -15 10,873 15 +6.2% +7.9%
Main scope effects:
* Disposals: identity management activity, deconsolidated from 1st May 2017
(Defence & Security segment)
* Acquisitions: consolidation of Guavus from 12 September 2017 (Defence &
Security segment)
COMMUNICATIONS DEPARTMENT - Thales - Tour Carpe Diem - 31 place des Corolles -
92098 Paris La Défense Cedex - France - Tel.: +33 (0)1 57 77 86 26 -
www.thalesgroup.com
THALES's latest news
19/04/2024 09:51
04/04/2024 20:16
02/04/2024 18:23
05/03/2024 07:00
12/02/2024 21:37
29/01/2024 08:00
19/01/2024 14:33
11/01/2024 15:09
12/12/2023 10:47
04/12/2023 07:00
Other stories
26/04/2024 12:48
26/04/2024 12:18
26/04/2024 11:56
26/04/2024 07:55
26/04/2024 12:04
26/04/2024 09:28
26/04/2024 10:13
26/04/2024 07:00
26/04/2024 12:20
26/04/2024 09:09
26/04/2024 09:40
26/04/2024 00:20
26/04/2024 01:32
26/04/2024 01:34
26/04/2024 10:31
26/04/2024 11:26
26/04/2024 10:24
25/04/2024 23:05
25/04/2024 18:17
26/04/2024 11:50
25/04/2024 08:39
26/04/2024 11:59
26/04/2024 11:31
26/04/2024 01:01
25/04/2024 19:34
26/04/2024 10:58
26/04/2024 11:10
26/04/2024 09:51
26/04/2024 09:17
26/04/2024 10:37
25/04/2024 19:30
26/04/2024 10:24
25/04/2024 13:28
25/04/2024 21:00
26/04/2024 09:18
26/04/2024 11:14
26/04/2024 03:31
25/04/2024 14:56