THALES (EPA:HO) - Thales reports its Q1 2021 order intake and sales - Press release - 6 May 2021

Transparency directive : regulatory news

06/05/2021 07:00

PRESS RELEASE
6 May 2021
Paris La Défense, France

  Thales reports its order intake and sales for the first quarter of 2021

* Solid order intake: EUR3.4 billion, up 31% on an organic basis(1) (up 28% on
a reported basis)
* Sales: EUR3.9 billion, up 1.9% on an organic basis (up 0.5% on a reported
basis)
* Return to growth despite on-going significant impact of the health crisis on
civil aeronautics and biometrics
* All financial objectives confirmed

Thales (Euronext Paris: HO) announced today its order intake and sales for the
first quarter of 2021.

Order intake        Q1 2021   Q1 2020  Total   Organic
in EUR millions                        change  change

Aerospace             998       778    +28%    +31%
Transport             259       156    +66%    +67%
Defence & Security  1,513       960    +58%    +57%
Digital Identity &
Security              636       761    -16%    -11%
Other                  10         7     nm      nm
Total               3,416     2,663    +28%    +31%
Sales
in EUR millions
Aerospace             971     1.083  -10.3%   -8.7%
Transport             344       347   -0.8%   +0.5%
Defence & Security  1,949     1.724  +13.1%  +12.3%
Digital Identity &
Security              636       727  -12.5%   -7.4%
Other                  16        18    nm       nm
Total               3,917     3,899   +0.5%   +1.9%
Of which mature
markets(2)          3,005     2,895   +3.8%   +4.5%
Of which emerging
markets(2)            912     1,004   -9.2%   -5.9%

"Q1 2021 sales and order intake were in line with our expectations. Order
intake grew particularly strongly in the space and defence businesses. Despite
the health crisis still heavily impacting civil aeronautics and biometrics,
sales were already back to organic growth. This performance shows the great
efforts of Thales teams, and I am grateful for their constant commitment to our
customers. We confirm all our financial objectives for 2021."
Patrice Caine, Chairman and Chief Executive Officer

(1) In this press release, "organic" means at constant scope and exchange
rates.
(2) Mature markets: Europe, North America, Australia, New Zealand. Emerging
markets: all other countries. See table on page 6.

Order intake

In the first quarter of 2021, order intake stood at EUR3,416 million, up 31%
compared to Q1 2020 at constant scope and exchange rates, and up 28% on a
reported basis, taking into account a negative exchange rate effect of almost
EUR60 million.

During the quarter, the Group recorded four large orders worth more than EUR100
million, representing a total amount of EUR622 million(3), compared to a single
large order in the first quarter of 2020:
* Two contracts related to the supply of Rafale aircraft to Greece and France
* The new generation of the Franco-Italian SAMP/T NG ground based air defense
system
* SATRIA, a telecommunications satellite aimed at reducing the digital divide
in Indonesia

Orders with a unit value of less than EUR10 million totalled EUR2,006 million,
up 4% from Q1 2020, excluding avionics and in-flight entertainment
businesses.

From a geographical(4) perspective, order intake was up 47% on an organic basis
in mature markets and down 4% on an organic basis in emerging markets.

Order intake in the Aerospace segment was up 31% on an organic basis to EUR998
million versus EUR778 million in Q1 2020. This improvement was driven by the
sharp increase in orders in the space business.

Order intake in the Transport segment was up 67% on an organic basis to EUR259
million, benefitting from a catch-up in contract signatures and a favourable
basis of comparison.

Order intake in the Defence & Security segment was up 57% on an organic basis
to EUR1,513 million, versus EUR960 million in Q1 2020, with three contracts
over EUR100 million.

Order intake in the Digital Identity & Security segment was, as in every
quarter, close to sales, as most businesses in this segment operate on short
cycles.

(3) This amount did not include the contract relating to the second generation
of the Galileo constellation. The first phase of this contract, booked in the
first quarter, is for an amount of just under EUR100 million. The remaining
phases, totalling around EUR650 million, are expected to be booked by the end
of 2021.
(4) See table on page 6.

Sales

Q1 2021 sales came in at EUR3,917 million versus EUR3,899 million in Q1 2020,
up 0.5% on a reported basis and up 1.9% at constant scope and exchange rates.

From a geographical(5) perspective, this growth was driven by mature markets,
which recorded organic growth of 4.5%, propelled for the most part by the
strong performance of the European (+6.8%) and Australian (+18.9%) markets.
This performance was partially offset by the decline in emerging markets
(organic growth: -5.9%)

In the Aerospace segment, sales totalled EUR971 million, down 8.7% compared to
Q1 2020 at constant scope and exchange rates. This decline was due to the 30%
drop in avionics and in-flight entertainment sales, still heavily impacted by
the health crisis. Space business sales recorded a sharp rebound, with organic
growth of +24%, thanks in particular to the institutional orders booked in
2020.

In the Transport segment, sales came in at EUR344 million, up 0.5% compared to
Q1 2020 at constant scope and exchange rates. The decline in sales on major
urban rail signalling contracts signed in 2015 and 2016 was offset by more
sustained activity on mainline rail projects. Travel limitations linked to the
pandemic continued to create occasional difficulties for on-site deployments.

Sales in the Defence & Security segment were EUR1,949 million, up 12.3% from Q1
2020 at constant scope and exchange rates. Almost all product lines recorded
organic growth over the quarter, including in particular surface radars, naval
businesses (with contracts such as F126 in Germany, T31 in the United Kingdom
and MMCM in France and the United Kingdom), network and infrastructure systems,
and military cybersecurity.

Sales in the Digital Identity & Security segment totalled EUR636 million, down
7.4% compared to Q1 2020 at constant scope and exchange rates. This decline
results from a strong performance in payment cards and SIM cards in Q1 2020, as
well as the ongoing impact of the health crisis on biometric solutions
(passports). The decline on a reported basis (-12.5%) takes into account a 4.9
point negative exchange rate effect (EUR36 million).

(5) See table on page 6.

Outlook

Q1 2021 order intake and sales are in line with expectations. In this context,
the Group confirms all of its 2021 objectives, as set out below.

Assuming an economic and public health situation that does not experience any
new, major disruptions, and a rapid normalisation of global supply chains for
semiconductors, Thales has set the following objectives for 2021:
* As in 2019 and 2020, a book-to-bill ratio above 1;
* Sales in the range of EUR17.1 billion to EUR17.9 billion,(6) taking into
account the significant ongoing disruptions in civil aeronautics and the
recovery of growth in other segments;
* An EBIT margin in the range of 9.5% to 10%, up 150 to 200 basis points from
2020, thanks to the full effect of the global crisis adaptation plan, ongoing
Ambition 10 competitiveness initiatives and the further ramp up Gemalto-related
cost synergies.

                                     ****

This press release contains certain forward-looking statements. Although Thales
believes that its expectations are based on reasonable assumptions, actual
results may differ significantly from the forward-looking statements due to
various risks and uncertainties, as described in the Company's Universal
Registration Document, which has been filed with the French financial markets
authority (Autorité des marchés financiers - AMF).

(6) Based on the scope and exchange rates of March 2021.

About Thales

Thales (Euronext Paris: HO) is a global leader in advanced technologies,
investing in digital and ?deep tech? innovations ? connectivity, big
data, artificial intelligence, cybersecurity and quantum computing ? to build
a confident future crucial for the development of our societies. The Group
provides its customers ? businesses, organisations and governments ? in the
defence, aeronautics, space, transport, and digital identity and security
domains with solutions, services and products that help them fulfil their
critical role, consideration for the individual being the driving force behind
all decisions.

Thales has 81,000 employees in 68 countries. In 2020, the Group generated sales
of EUR17 billion.

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
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Order intake by destination - Q1 2021

(in EUR millions) Q1 2021 Q1 2020 Total   Organic Q1 2021
                                  change  change  weighting
                                                   as a %
France             892     568    +57%    +57%    26%
United Kingdom     162     139    +17%    +18%     5%
Rest of Europe     946     581    +63%    +63%    28%
Sub-total Europe 2,001   1,289    +55%    +56%    59%
United States
and Canada         503     446    +13%    +20%     4%
Australia and
New Zealand        130      76    +71%    +58%    15%
Total mature
markets          2,634   1,811    +45%    +47%    77%
Asia               551     407    +35%    +40%     2%
Near and Middle
East                83     303    -73%    -72%    16%
Rest of the world  149     142     +4%    +11%     4%
Total emerging
markets            782     852     -8%     -4%    23%
Total all
markets          3,416   2,663    +28%    +31%   100%

Sales by destination ? Q1 2021

(in ? millions)  Q1 2021 Q1 2020  Total       Organic  Q1 2021
                                  change      change   weighting
                                                        as a %
France            1,160    1,105     +5.0%     +5.1%    29.6%
United Kingdom      263      263     -0.1%     +1.0%     6.7%
Rest of Europe      913      823    +11.0%    +11.1%    16.9%
Sub-total Europe  2,337    2,192     +6.6%     +6.8%    59.7%
United States
and Canada          410      503    -18.6%    -13.0%    10.5%
Australia and
New Zealand         258      200    +29.4%    +18.9%     6.6%
Total mature
markets           3,005    2,895     +3.8%     +4.5%    76.7%
Asia                467      515     -9.2%     -6.3%    11.9%
Near and Middle
East                227      257    -11.7%     -8.7%     5.8%
Rest of the world   217      232     -6.2%     -2.0%     5.5%
Total emerging
markets             912    1,004     -9.2%     -5.9%    23.3%
Total all markets 3,917    3,899     +0.5%     +1.9%     100%

Organic change in sales
(in ? millions)

  2020   Exchange    Impact of   2020 Impact of     Total   Organic
  sales rate effect  disposals  sales acquisitions  change  change
Q1 3,899   -54           -      3,917     -         +0.5%   +1.9%

Main scope effects: none

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

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THALES (EPA:HO) - Thales reports its Q1 2021 order intake and sales - Press release - 6 May 2021

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