THALES (EPA:HO) - Thales adjusts its 2019 organic sales growth target - Press release - 17 October 2019
Transparency directive : regulatory news
17/10/2019 19:00
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PRESS RELEASE
17 October 2019 - 19:00 CET
Paris La Défense, France
Thales adjusts down its 2019 organic sales growth target and confirms its other
short and medium-term financial targets
* Q3 2019 sales in line with consensus expectations: EUR4.2 billion, up 23.4%
(+0.9% on an organic basis(1))
* 2019 sales growth target adjusted: growth now expected around +1%
* Confirmation of all other 2019 financial objectives (order intake and EBIT(2)
as well as medium-term financial objectives presented at the 3 October
Capital Markets Day
Thales (Euronext Paris: HO) will disclose its order intake and sales for the
period ending 30 September 2019 at 7am CET on Tuesday 22 October.
In accordance with EU regulation No. 596/2014, which provides that issuers
shall inform the public as soon as possible of inside information directly
relevant to them, the Group is today announcing the adjustment of its 2019
organic sales growth target.
Thales now expects its organic sales growth to be around 1% over Full Year
2019(3). This adjustment is due to 2 operating segments: Aerospace and
Defence & Security.
In the Aerospace segment, operators of commercial telecommunication satellites
continued to adopt a wait-and-see attitude in the 3rd quarter, resulting in a
lower than expected order intake, which will therefore contribute only slightly
to Q4 sales. For the Full Year 2019, the Group now anticipates a decline of
around 13% in space sales(4).
Nevertheless, the Group is currently participating in the final stage of 4
significant commercial satellite tenders, whose conclusion is expected in the
coming weeks. This level of commercial activity confirms the gradual recovery
of this market.
(1) In this press release, "organic" means at constant scope and currency. See
definition page 27 of the 2018 registration document, and detailed computation
on page 3
(2) Non-GAAP financial indicator, see definition page 27 of the 2018
registration document
(3) Previous target: "at the lower end of the 3 to 4% range"
(4) Previous target: "decline of around 10%". This business generated sales of
EUR2.45 billion in 2018.
The long-term outlook for space markets remains robust, driven notably by the
increase in space agency budgets, the growing importance of space systems for
military applications, and the strong development of commercial connectivity
needs.
In the Defence & Security segment, Full Year 2019 organic sales growth will
remain high, around 6 to 7%, but should be lower than previously anticipated.
The Group is facing a few delays on a limited number of projects, including a
slower than expected production ramp-up on the Hawkei Australian military
vehicles, and delays in contract awards by a few customers.
The 2019-23 growth outlook in this segment is unchanged.
At EUR4,220m, Q3 sales are in line with the consensus forecast of analysts who
follow Thales results on a regular basis(5). Q3 sales and organic sales growth
are detailed in appendix, page 3.
The acceleration of competitiveness initiatives enables the Group to maintain
unchanged its Full Year 2019 EBIT target: Thales should deliver an EBIT of
between EUR1,980 million and EUR2,000 million, based on September 2019 scope
and currency.
The Group also confirms its Full Year 2019 order intake target, expected to be
slightly above EUR18 billion.
This press release contains inside information as per the definition of article
7 of EU regulation No. 596/2014
It 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).
(5) Q3 2019 consensus sales collected between 10 and 15 October: EUR4,235m. See
https://www.thalesgroup.com/en/investor/publications/
releases-publications/consensus
Sales by operating segment - 9 months and Q3 2019
In EUR millions
9m 2019 9m 2018 Total Organic
change change
Aerospace 3,787 4,010 -5.6% -6.8%
Transport 1,268 1,373 -7.6% -8.9%
Defence & Security 5,670 5,319 +6.6% +7.7%
Digital Identity
& Security 1,631 131 n.s. n.s.
Other 54 40 - -
Total 12,410 10,873 +14.1% +0.0%
In EUR millions Q3 2019 Q3 2018 Total Organic
change change
Aerospace 1,177 1,242 -5.2% -6.3%
Transport 433 469 -7.6% -8.8%
Defence & Security 1,788 1,650 +8.4% +9.6%
Digital Identity
& Security 802 44 n.s. n.s.
Other 19 17 - -
Total 4,220 3,421 +23.4% +0.9%
Organic change in sales by quarter
In EUR millions
2018 Currency Impact of 2019 Impact of Total Organic
sales impact disposals sales acquisitions change change
Q1 3,412 +37 -25 3,361 +4 -1.5% -2.0%
Q2 4,040 +23 -26 4,829 +759 +19.5% +0.8%
H1 7,452 +60 -51 8,190 +763 +9.9% -0.5%
Q3 3,421 +25 -24 4,220 +766 +23.4% +0.9%
9 months 10,873 +85 -75 12,410 +1,529 +14.1% +0.0%
About Thales
Thales (Euronext Paris: HO) is a global technology leader shaping the world of
tomorrow today. The Group provides solutions, services and products to
customers in the aeronautics, space, transport, digital identity and security,
and defence markets. With 80,000 employees in 68 countries, Thales generated
sales of EUR19 billion in 2018 (on a pro forma basis including Gemalto).
Thales is investing in particular in digital innovations - connectivity, Big
Data, artificial intelligence and cybersecurity - technologies that support
businesses, organisations and governments in their decisive moments.
CONTACTS
Thales, media relations
Cédric Leurquin
+33 (0)1 57 77 90 93
cedric.leurquin@thalesgroup.com
Thales, analysts/investors
Bertrand Delcaire
+33 (0)1 57 77 89 02
ir@thalesgroup.com
FIND OUT MORE
Thales Group
Twitter @ Thalesgroup
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