Slide 1: H1 2023 results
H1 2023 results 21st July 2023 www.thalesgroup.com
Slide 2: H1 2023 highlights
H1 2023 highlights Strong H1 order intake, in line with last year excluding jumbo UAE Rafale order Robust sales growth, notably in Aerospace, in spite of continuous supply chain challenges EBIT margin in line with full year guidance range Full Year sales growth guidance upgraded Acquisition of Cobha
Slide 3: H1 2023 key figures
H1 2023 key figures Order intake and book-to-bill Sales EBIT and EBIT margin(b) €m €m €m and % +11.4% -24% +5.6% +13.1%(a) -23%(a) +7.7%(a) 1.36 11.4% 0.98 10.8% Adjusted net income(b) Free operating cash-flow(b) Net cash (debt) position(b) €m €m €m +13% -88% (a) Organic: at constant scope and excha
Slide 4: H1 2023 order intake
H1 2023 order intake Order intake by contract unit value Organic growth: -23% Strong H1 order intake, comparable to €m last year excluding jumbo UAE Rafale 11,208 order booked in Q2 2022 6 large(a) orders booked in Q2 2023, 8,563 for a total of 9 in H1 2023 Unit value> €100m • 4 in Defense & Securit
Slide 5: H1 2023 organic sales growth
H1 2023 organic sales growth H1 sales growth drivers Significant currency impact over H1 €m • Q2: -€73m (-1.6 pts) Reported growth: ++5.6% • H1: -€79m (-1.0 pts) H1 sales organically up 7.7% after a Organic strong Q1 growth • DIS and Aerospace delivering double-digit Currency organic growth & scope
Slide 6: H1 2022 to H1 2023 EBIT bridge
H1 2022 to H1 2023 EBIT bridge Gross margin R&D Marketing & sales G&A Restructuring -43 Equity expenses expenses affiliates -53 -11 -2 -37 Scope, currency and Naval Group: -45 Others: +8 pensions 0 +248 Scope: -9 Currency: -6 Pensions: +15 H1 2022 H1 2023 EBIT EBIT H1 2023 results - 6
Slide 7: Aerospace: H1 2023 key figures
Aerospace: H1 2023 key figures H1 H1 Change €m 2023 2022 Total Organic Order intake 2,344 2,393 -2% -4% Sales 2,465 2,211 +11.5% +10.1% EBIT 171 97 +76.7% +79.0% in % of sales 7.0% 4.4% +2.6 pts +2.8 pts Order intake slightly below H1 2022, with contrasted dynamics • On-going recovery of civil avion
Slide 8: Defense & Security: H1 2023 key figures
Defense & Security: H1 2023 key figures H1 H1 Change €m 2023 2022 Total Organic Order intake 4,603 7,150 -36% -36% Sales 4,626 4,379 +5.6% +5.3% EBIT 567 545 +4.0% +3.3% in % of sales 12.3% 12.4% -0.2 pts +0.2 pts Robust order intake vs. high comps in H1 2022 • 5 large contracts in H1 including jumb
Slide 9: Digital Identity & Security (DIS): H1 2023 key figures
Digital Identity & Security (DIS): H1 2023 key figures H1 H1 Change €m 2023 2022 Total Organic Sales 1,595 1,631 -2.3% +11.7% EBIT 253 201 +25.9% +35.7% in % of sales 15.9% 12.3% +3.6 pts +4.7 pts Order intake structurally aligned with sales Double-digit sales growth driven by outstanding Q1 perform
Slide 10: Summary adjusted P&L: from EBIT to adjusted net income
Summary adjusted P&L: from EBIT to adjusted net income H1 2023 H1 2022 €m EBIT 993 891 Cost of net financial debt and other financial results 1 (42) Finance costs on pensions and other employee benefits (38) (15) Income tax (175) (141) Effective tax rate 20.0% 19.7% Adjusted net income - discontinue
Slide 11: H1 2023 Free operating cash-flow
H1 2023 Free operating cash-flow €m H1 2023 H1 2022 Operating cash flow before WCR changes, 1,319 1,176 interest and tax Significant negative H1 WCR variance Change in WCR and reserves for due to higher stocks + (686) 4 contingencies • Higher revenue and impact of inflation Pension cash out, excludi
Slide 12: Movement in net debt over H1 2023
Movement in net debt over H1 2023 €m Other New leases Dividends (IFRS16) paid +270 +49 Of which share buy-back: +210 Free Deficit operating payment cash-flow on UK Acquisitions pensions & disposals +7 +468 Net debt Net debt -99 +51 Net debt at 30 Jun 22 at 31 Dec 22 at 30 Jun 23 Of which disc. op: +
Slide 13: Strategy and outlook
2023 half-year results Strategy and outlook
Slide 14: 2023: 4 strategic priorities
2023: 4 strategic priorities 1 Ramp-up capacity to address strong demand 2 Sustain R&D investments to reinforce technology leadership 3 Take our sustainability performance to the next level 4 Leverage consistently high cash generation H1 2023 results - 14
Slide 15: Solid progress in H1 2023
Solid progress in H1 2023 Capacity 5,300 recruitments completed in H1 2023 1 ramp-up H1 capex up 40%+, ahead of full year plan Technology Multiple wins of ground radar competitions 2 leadership Launch of world’s first certified integrated SIM (iSIM) with Qualcomm Win of new in-orbit servicing demons
Slide 16: 2023 financial objectives
2023 financial objectives Order intake Book-to-bill above 1 Unchanged Sales +5% to +7% organic growth Upgraded corresponding to €17.9 to 18.2 billion(a) EBIT margin(b) 11.5% to 11.8%(a) Unchanged (a) Based on July 2023 scope and foreign exchange rates. Assuming no new major disruptions of the health
Slide 17: Appendix
Appendix www.thalesgroup.com
Slide 18: Upcoming events
Upcoming events Q3 and 9m 2023 sales 31st October 2023 (before market) H1 2023 results - 18
Slide 19: Summary adjusted P&L: from sales to EBIT
Summary adjusted P&L: from sales to EBIT H1 2023 H1 2022 Change €m % of sales €m % of sales total organic Sales 8,716 8,256 +5.6% +7.7% Gross margin 2,457 28.2% 2,220 26.9% +10.7% +12.1% Indirect costs (1,509) -17.3% (1,416) -17.2% +6.5% +7.8% o/w R&D expenses (513) -5.9% (486) -5.9% +5.4% +9.3% o/w
Slide 20: H1 2023 order intake by destination
H1 2023 order intake by destination H1 H1 Change In € millions 2023 2022 Total Organic ROW ME France 2,058 2,259 -8.9% -8.7% United Kingdom 577 438 +31.7% +37.0% Asia France Rest of Europe 2,771 2,037 +36.1% +39.3% Europe(a) 5,406 4,734 +14.2% +15.6% AU/NZ North America 1,048 1,459 -28.2% -28.0% Aus
Slide 21: H1 2023 sales by destination
H1 2023 sales by destination H1 H1 Change In € millions 2023 2022 Total Organic ROW France 2,639 2,447 +7.8% +8.0% ME United Kingdom 573 475 +20.5% +25.4% France Rest of Europe 2,057 2,020 +1.9% +3.8% Asia Europe(a) 5,268 4,942 +6.6% +8.0% North America 1,215 1,058 +14.9% +14.7% AU/NZ Australia / NZ
Slide 22: H1 2023 adjusted net result
H1 2023 adjusted net result Consolidated Actuarial Adjusted Change in fair P&L Impact of business Disposal of assets gains/losses on P&L €m combination and others value of derivative other long term FX instruments H1 2023 benefits H1 2023 Sales 8,716 — — — — 8,716 Cost of sales -6,438 179 — — — -6,2
Slide 23: H1 2022 adjusted net result
H1 2022 adjusted net result Consolidated Actuarial Adjusted Change in fair P&L Impact of business Disposal of assets gains/losses on P&L €m combination and others value of derivative other long term FX instruments H1 2022 benefits H1 2022 Sales 8,256 — — — — 8,256 Cost of sales -6,223 187 — — — -6,0
Slide 24: H1 2023 EBIT by operating segment
H1 2023 EBIT by operating segment H1 H1 Change €m / % of sales 2023 2022 total organic Aerospace 171 6.9% 97 4.4% +76.7% +79.0% Defence & Security 567 12.3% 545 12.4% +4.0% +3.3% Digital Identity & Security 253 15.9% 201 12.3% +25.9% +35.7% EBIT - operating segments 992 11.4% 843 10.3% +17.6% +19.5%
Slide 25: Organic sales growth per quarter
Organic sales growth per quarter 2020 2018 2021 2022 2019 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Aerospace Defence & Security Digital Identity & Security Total(a) (a) Excluding Transport in all periods (Transport business classified as "discontinued operations" as of 01/01/2021) H1 2023 resu
Slide 26: Q2 2023 order intake by operating segment
Q2 2023 order intake by operating segment Q2 Q2 Change €m 2023 2022 Total Organic Aerospace 1,147 1,211 -5% -5% Defense & Security 3,162 6,051 -48% -48% Digital Identity & Security 816 892 -9% +5% Other 18 22 Total 5,142 8,176 -37% -36% H1 2023 results - 26
Slide 27: Q2 2023 sales by operating segment
Q2 2023 sales by operating segment Q2 Q2 Change €m 2023 2022 Total Organic Aerospace 1,312 1,186 +10.6% +9.9% Defense & Security 2,547 2,429 +4.9% +5.2% Digital Identity & Security 816 892 -8.5% +4.7% Other 16 20 Total 4,690 4,526 +3.6% +6.3% H1 2023 results - 27
Slide 28: Transport: H1 2023 key figures
Transport: H1 2023 key figures H1 H1 Change €m 2023 2022 Total Organic Order intake 902 841 +7% +9% Sales 853 778 +9.7% +11.7% EBIT 44 43 +2.6% +2.6% in % of sales 5.2% 5.5% - 0.4 pts - 0.5 pts Order intake driven by strength of main line business Robust sales growth Stable EBIT margin H1 2023 resul
Slide 29: Definition of non-GAAP measures and other remarks
Definition of non-GAAP measures and other remarks Rounding of amounts in euros In the context of this presentation, the 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 ratio
Slide 30: Thales investor relations contact
Tour Carpe Diem 31 Place des Corolles 92098 Paris La Défense France ir@thalesgroup.com This presentation contains certain forward-looking statements. Although Thales believes that its expectations are based on reasonable assumptions, actual results may differ significantly from these forward-looking