Thales Sa · EURONEXT:HO
Thales Sa — Investor Day (October 2021)
59 slides from Thales Sa's investor day presentation, Oct 5, 2021
Slide 1: Building a future we can all trust
Building a future we can all trust Safer, greener and more inclusive Thales’ inaugural ESG Investor Day 5 October 2021 www.thalesgroup.com
Slide 2: Agenda
Agenda 3:00 pm Vision and key priorities 5:10 pm Strengthening our ESG culture Patrice Caine to foster our development Philippe Knoche, Isabelle Simon, Clément de Villepin 3:15 pm Accelerating our strategy for a low-carbon future Jean-Loïc Galle, Yannick Assouad, 5:30 pm Final Q&A session Marko Erma
Slide 3: 3 panels today
3 panels today Accelerating our Developing Strengthening our ESG strategy for a smarter solutions for culture to foster low-carbon future a sustainable world our development Jean-Loïc Galle Philippe Knoche Senior EVP, Chief Operating Hervé Derrey Independent board member Officer and Chief Performanc
Slide 4: Vision and key priorities
Patrice Caine Chairman and CEO ESG Investor Day – 5 October 2021 Vision and key priorities 4 ESG Investor Day – 5 October 2021
Slide 5: Sustainability ambitions anchored in our purpose
Sustainability ambitions anchored in our purpose Our purpose Our ambitions “Building a future Maximize the sustainability impact we can all trust” of our portfolio of solutions Embed ambitious sustainability commitments in all processes Working to make the world safer, greener and more inclusive 5 E
Slide 6: Taking our performance to the next level
Taking our performance to the next level Ethics & Health & safety Strategy for a low-carbon future Diversity & inclusion compliance at work Reduction of operational CO2 emissions(a) Anticorruption of management Frequency rate of NET 100% - 35% - 50% 75% committees with accidents at work ZERO at leas
Slide 7: Addressing major societal issues through a unique portfolio of solutions
Addressing major societal issues through a unique portfolio of solutions Greener: ~20% Design solutions to observe and understand climate phenomena and Safer: ~60% to reduce the environmental impact of our customers Keep citizens safe in both ~30% Aerospace • Environmental monitoring and physical an
Slide 8: Accelerating our strategy for a low-carbon future
Jean-Loïc Galle Senior EVP, Chief Operating Officer and Chief Performance Officer Yannick Assouad ESG Investor Day – 5 October 2021 EVP, Avionics Accelerating our strategy Marko Erman SVP, Chief Scientific Officer for a low-carbon future 8 ESG Investor Day – 5 October 2021
Slide 9: What are we talking about?
What are we talking about? Operational CO2 emissions Other CO2 emissions Avoided CO2 emissions Emissions related to other processes Benefit to other players in value chain Emissions under company control: in the corporate value chain, mainly from the use of products developed direct (scope 1) and in
Slide 10: Accelerating our strategy for a low-carbon future
Accelerating our strategy for a low-carbon future Reduce operational CO2 Boost product Step up engagement emissions faster, innovation with supply chain aiming for and eco-design net zero by 2040 Full responsibility Cooperation Support our customers and society Overall action plan to be submitted to
Slide 11: Operational emissions: over-performance since 2018
Operational emissions: over-performance since 2018 Thales’ operational CO2 emissions(a) Carbon intensity 31.4 (tons of CO2 per 2018-2020: €m sales) 2 key reduction levers ~-47% 1 Optimization of energy efficiency: 18.4 Energy consumption of buildings (c) 16.5 Heat recovery for cold units Operational
Slide 12: Operational emissions: now targeting -50% by 2030, net zero by 2040
Operational emissions: now targeting -50% by 2030, net zero by 2040 Thales’ operational CO2 emissions(a) 2021-2030: Carbon intensity 18.4 Robust action plan based on 4 pillars (tons of CO2 per 1 Further reduction of energy consumption €m sales) Real estate footprint optimization and energy ~-40% eff
Slide 13: Stepping up engagement with supply chain on environmental challenges
Stepping up engagement with supply chain on environmental challenges • Well advanced engagement with 150 most emissive suppliers CO2 emissions - Tracking of estimated CO2 emissions for goods and related to services delivered to Thales goods & services - Review and challenge of supplier action plans
Slide 14: Boost product innovation and eco-design: illustrations
Boost product innovation and eco-design: 3 illustrations Aerospace: Making digital Accelerating inventing technologies our eco-design a sustainable environmentally initiatives future friendly together 14 ESG Investor Day – 5 October 2021
Slide 15: Accelerating our eco-design initiatives
Accelerating our eco-design initiatives … and supported by specific tools Our objective Eco-design options: CLOE(a) from user value • 2020: 44% of new products description to developed with eco-design engineering requirements requirements • 2023 target: 100% CO2 emissions: PETER(b) featuring a uniqu
Slide 16: Aerospace: inventing a sustainable future together
Aerospace: inventing a sustainable future together 16 ESG Investor Day – 5 October 2021
Slide 17: CO2 emissions: Thales' actions aligned with aviation 2050 ambition
Thales’ actions are fully aligned with the aviation sector’s 2050 ambition AVIATION SECTOR’S DECARBONIZATION LEVERS THALES’ CONTRIBUTIONS EMISSION POTENTIAL APPROACH TYPE IMPACT If nothing is done CO2 footprint reduction in Aircraft the operational use & Very efficiency Operations flight performance
Slide 18: Significant near-term opportunities through weight reduction
Significant near-term opportunities through weight reduction Redesign of A320 rudder New generation in-flight control system entertainment • Gain safety and reliability, reduce weight and • Integrate more reliable, high resolution 4K Purpose lower production and maintenance costs on displays with lo
Slide 19: Aircraft operations optimization: a major CO2 reduction opportunity
Aircraft operations optimization: a major CO2 reduction opportunity for aviation Major CO2 emission reduction achievable Possible CO2 emission reduction through operations optimization via aircraft operations optimization (avoided emissions, million tons of CO2) 10 to 15% CO2 reduction - CO2-optimiz
Slide 20: Addressing aircraft operations optimization through continuous innovations
Addressing aircraft operations optimization through continuous innovations in both avionics and Air Traffic Control PureFlyt Redesign of A320 rudder control system TopSky-ATC TopSky-ATC One One Flight Management System Air Traffic Air Traffic Management Management system Syste • Improve flight traje
Slide 21: Making digital technologies environmentally friendly
Making digital technologies environmentally friendly 21 ESG Investor Day – 5 October 2021
Slide 22: Big data and cloud: from big to smart
Big data and cloud: from big to smart Commercial application 2020-2025 Big is beautiful? Smart is useful! Big Data Smart Data Cloud Far Edge Cloud Edge Cloud ~10x data and communication reduction at each stage Collect as much data as possible Reduce the volume of collected data, and store them in th
Slide 23: Artificial Intelligence: data vs knowledge
Artificial Intelligence: data vs knowledge Commercial application 2020-2025 Data-based Psibernetix A Thales Company Deep Learning & No a priori knowledge Machine Learning Black box High power consumption Knowledge-based Symbolic Artificial Reasoning Intelligence Explainable / Formal proof 200x faste
Slide 24: Quantum antennas
Quantum antennas Commercial application 2025-2030 Current technologies Quantum technologies Antenna dimension depends on frequency. A quantum antenna surface At low frequency, an antenna can measure is ~1 square cm and 10 – 100m or even more detects ALL frequencies Quantum technologies have the pote
Slide 25: Accelerating our strategy for a low-carbon future: key takeaways
Accelerating our strategy for a low-carbon future: key takeaways Reducing operational CO2 emissions faster, aiming for net zero by 2040 Based on detailed action plans Plan to be submitted to SBTi certification Commitments in line with Thales purpose, supporting Increased focus on product innovation
Slide 26: Developing smarter solutions for a sustainable world
Hervé Derrey EVP, Space Alex Cresswell Chairman and CEO, ESG Investor Day – 5 October 2021 Thales UK Developing Philippe Vallée EVP, Digital Identity and Security smarter solutions for a sustainable world 27 ESG Investor Day – 5 October 2021
Slide 27: Thales Alenia Space: Space for life
Thales Alenia Space: “Space for life” 28 ESG Investor Day – 5 October 2021
Slide 28: Thales Alenia Space's vision for a safer, greener, more inclusive world
Thales Alenia Space’s vision for a safer, greener and more inclusive world Space to navigate Space ~75% Space of portfolio to observe Today’s focus Space for life to connect & protect Thales Alenia Space believes in space as the new horizon of humankind, which will enable to build a better life on E
Slide 29: Unique expertise to serve important missions
Unique expertise to serve important missions Space to observe & protect Space to navigate Space to connect • Key role of earth observation • Precise satellite-based positioning • Digital divide reduction and in mitigation and adaptation delivering major efficiency acceleration of global citizen Focu
Slide 30: Sustainability: a strong market growth driver, notably in Europe
Sustainability: a strong market growth driver, notably in Europe Sustainability-focused European space budgets (€bn per year) Space projects at the heart of European Union political priorities, driving significant budget Up increases +5 to +7% to 5.5 CAGR Unprecedented European Space Agency 2020-27
Slide 31: Thales Alenia Space leadership driving market outperformance
Thales Alenia Space leadership driving market outperformance Space sales trend(a) Partner of choice with proven technological (€bn) and industrial competencies ~+7% • Technological leader in geostationary Very High CAGR ~2.5 Space Throughput Satellites 2020-24 to connect • Space Inspire: flexible so
Slide 32: Accelerating initiatives towards a sustainable space ecosystem
Accelerating initiatives towards a sustainable space ecosystem Delivering major improvements in end-to-end Improvement in telecom satellite weight performance satellite system performances (launch weight to deliver 1 Gb/s) Pioneer in transition from chemical to electric propulsion, enabling major sa
Slide 33: Thales Alenia Space: key takeaways
Thales Alenia Space: key takeaways Space for life: vision for a safer, more environmentally-friendly and more inclusive world Sustainability drives major Sustainability: a strong market growth growth opportunities for driver, notably in Europe Thales Alenia Space, underpinning Thales Alenia Space le
Slide 34: Thales' defence capabilities contributing to sustainable societies
Thales’ defence capabilities: strongly contributing to more sustainable societies 35 ESG Investor Day – 5 October 2021
Slide 35: Defence is essential to safe, stable and prosperous societies
Defence is essential to safe, stable and prosperous societies We live in a globalised Combining military capability, The protection offered by and increasingly diplomacy and development defence to wider society unpredictable world, assistance is necessary to achieve provides the foundation for facin
Slide 36: Thales: leading in one of the most regulated global industries
Thales: leading in one of the most regulated global industries Strict export controls What we stand for Committed and certified to stringent export control regulations Processes integrated in day-to-day business through Operating ethically; selling training, audit, and focus on continuous improvemen
Slide 37: The changing nature of defence requires new operational capabilities
The changing nature of defence requires new operational capabilities Creation of social value Defence and Changing nature of warfare and prosperity sustainability International forces cooperating pan-domain Hybrid warfare • International forces cooperating to resolve conflict • Economic prosperity •
Slide 38: Solutions deliver enhanced performance and reduced environmental footprint
Thales’ solutions deliver both enhanced performance and reduced environmental footprint Sales to defence customers by product type, 2020 Increased efficiency through improved asset collaboration across all domains Increasing mission performance whilst reducing size, weight, power and logistics Netwo
Slide 39: Defence solutions contribute to a more sustainable future in civil markets
Thales’ defence solutions contribute to a more sustainable future in many civil markets Expertise in unmanned Cybersecurity solutions addressing Defence innovations to solve defence systems applied similar threats across defence challenges in other industries to civil drones and civil markets Thales
Slide 40: Defence capabilities: key takeaways
Defence capabilities: key takeaways Defence contributes to safe, stable and prosperous societies Thales implements best-in-class ethics & compliance practices Defence innovation fuels The nature of warfare has changed, growth for Thales, requiring smart and digital solutions in which Thales excels s
Slide 41: Digital Identity & Security: building trust in a digital future
Digital Identity & Security: building trust in an increasingly digital future 42 ESG Investor Day – 5 October 2021
Slide 42: Digital Identity & Security: building trust in an increasingly digital future
Digital Identity & Security: building trust in an increasingly digital future Enabling a digital Physical and digital transformation of identity for all businesses and governments that is Privacy and cyber- socially responsible security for everyone and has a low-carbon footprint Sustainable growth
Slide 43: Contributing to society by providing a legal identity for all
Contributing to society by providing a legal identity for all We support UN Sustainable Development Goal 16 An identity gives access to education, A major program funded health services, social benefits, voting by the World Bank with over and government services $1.5bn committed so far Thales: civil
Slide 44: Trusted digital identities and data privacy for all
Trusted digital identities and data privacy for all Cybersecurity product market growth Cybersecurity is key to sustainability (€bn) Increasingly impacting identity thefts, data leaks, ransomware attacks undermine trust in digital +10% transformation 85 CAGR Privacy and sovereignty build trust 53 Th
Slide 45: Eco-design as a driver of differentiation
Eco-design as a driver of differentiation Eco-design at scale across full product portfolio New products deliver 50 to 85% carbon savings SIM card with 50% Bio-sourced payment card (purchase of plastic, transport) less plastic (PLA from corn) Ambitious target: eSIM and eco-designed smart cards to re
Slide 46: Migrating to eSIM: a major low-carbon / plastic-less product
Migrating to eSIM: a major low-carbon / plastic-less product eSIM-equipped smartphone market growth (Million units shipped) >1,000 x6 Base scenario: supplying and activating 200m eSIMs in 2025 180 ~900 tons of plastic saved every year 2020 2025 ~15,000 tons of CO2 saved every year Source: Counterpoi
Slide 47: Digital identity & security: key takeaways
Digital identity & security: key takeaways Digital identity and security: key building blocks of a sustainable digital future Thales: best positioned to enable Thales: recognized global leader in a digital transformation that data protection and identity & access is both socially responsible managem
Slide 48: Strengthening our ESG culture to foster our development
Philippe Knoche Independent board member Chairman of the governance and remuneration committee ESG Investor Day – 5 October 2021 Isabelle Simon Strengthening our ESG Group secretary & General counsel Clément de Villepin culture to foster our Senior EVP, Human Resources development 51 ESG Investor Da
Slide 49: Building a future we can all trust: Final Q&A session
Patrice Caine Chairman and CEO Philippe Knoche Independent board member Chairman of the governance and remuneration committee ESG Investor Day – 5 October 2021 Jean-Loïc Galle Building a future Senior EVP, Chief Operating Officer and Chief Performance Officer we can all trust Clément de Villepin Sen
Slide 50: Conclusion
Patrice Caine Chairman and CEO ESG Investor Day – 5 October 2021 Conclusion 53 ESG Investor Day – 5 October 2021
Slide 51: Building a future we can all trust: safer, greener and more inclusive
Building a future we can all trust: safer, greener and more inclusive Portfolio addressing key societal needs Compelling ESG strategy aligned with purpose Sustainability: a key lever in Thales’ growth strategy Sustainable value creation Accelerating sustainability initiatives with enhanced resilienc
Slide 52: Appendix
ESG Investor Day – 5 October 2021 Appendix 56 ESG Investor Day – 5 October 2021
Slide 53: Importance for stakeholders
Updated materiality matrix based on comprehensive third-party led discussion with stakeholders Climate change strategy • Research conducted in May- Talent attraction & retention, Very High diversity & inclusion July 2021 by an independent Product third party Ethics & safety & Compliance quality • Id
Slide 54: Full list of topics assessed in research
Full list of topics assessed in research ENVIRONMENTAL SOCIAL GOVERNANCE Climate change strategy Talent attraction and retention, diversity & inclusion Corporate governance • Solutions to Address Climate Change Risks • Diversity & Inclusion • Board Structure & Composition • Research and Investment i
Slide 55: Gender diversity scorecard and targets
Gender diversity scorecard and targets Gender diversity ratios Glass ceiling KPIs and targets (large European A&D companies) Board of directors Percentage 50% 42% 39% 33% 75% of management 27% 25% committees with 68% at least 3 women (44 committees) Percentage of women in senior Executive committee
Slide 56: Thorough approach to product safety and security
Thorough approach to product safety and security Compliance with stringent industry standards for avionics (DAL), air traffic 1 management (SWAL) and transportation (SIL) Dedicated safety/security organizations in place in all business units, 2 independent from engineering organizations 3 Comprehens
Slide 57: Involvement in controversial and nuclear weapons
Involvement in controversial and nuclear weapons Responsible policy regarding controversial topics White phosphorous: complete phase-out by mid-2022 - Production of final batch of smoke shells Thales does not manufacture: to protect French army • Nuclear weapons - Less than 0.1% of total group sales
Slide 58: Digital ethics charter: commitments on 3 major societal challenges
Digital ethics charter: outlining commitments with respect to 3 major societal challenges Human dimension Safety and security Environmental protection Placing humans at the center Helping to make the world Using digital technologies of digital technologies and safer and more secure by to help build
Slide 59: Contact and forward-looking statements
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