Thales Sa · EURONEXT:HO
Thales Sa — Investor Presentation (March 2025)
66 slides from Thales Sa's investor presentation, March 2025
Slide 1: Investor meeting March 2025
Investor meeting March 2025 www.thalesgroup.com
Slide 2: Table of contents
Table of contents 01 02 03 04 2028 strategy & Introduction to Thales FY 2024 results 2025 priorities & outlook financial trajectory1 1Presented at the Capital Markets Day held on November 14, 2024 2
Slide 3: Thales today: a global tech leader in Defence, Aerospace, Cyber & Digital
Thales today: a global tech leader in Defence, Aerospace, Cyber & Digital Sales by segment Adjusted EBIT margin R&D total spend 27% Aerospace 11.6% 11.8% 11.0% 10.2% Avionics 9.0% ~16% 8.1% 53% ~70% ~30% €20.6bn Defence Customer- ~€4.2bn Self-funded funded R&D ~20% of sales R&D 20% Cyber & Digital 2
Slide 4: Portfolio focused on leading and highly synergistic businesses
Portfolio focused on 3 leading and highly synergistic businesses Critical decision chains Sensing and data gathering Data transmission and storage Data processing and decision making Military Flight management Aerospace Observation satellites communications systems Defence Advanced sensors Digital s
Slide 5: Thales builds on key strengths
Thales builds on 4 key strengths Connectivity Big data Mobility analytics Artificial Cyber- intelligence AI security Cutting edge R&D Deep domain knowledge Large digital asset base Global presence ~€4.2bn, ~20% of sales Top 3 globally or Thales portfolio: Presence in 60+ ~70% customer-funded #1 in E
Slide 6: Table of contents
Table of contents 01 02 03 04 2028 strategy & Introduction to Thales FY 2024 results 2025 priorities & outlook financial trajectory1 1Presented at the Capital Markets Day held on November 14, 2024 6
Slide 7: 2024 key figures
2024 key figures Order intake and book-to-bill (€m) Sales (€m) Adjusted EBIT(b) (€m and %) +9% +11.7% +13.4% +6%(a) +8.3%(a) +5.7%(a) 1.26 1.23 11.6% 11.8% Adjusted net income(b) (€m) Free operating cash-flow(b) Dividend (€) from continued activities (€m) (c) +7.4% +8.8% +8.8% a. Organic: at constan
Slide 8: Continuous progress in CSR performance in 2024
Continuous progress in CSR performance in 2024 Absolute Scopes 1 & 2 CO2 emissions Absolute Scope 3 CO2 Emissions Thales Climate Passport trainings % of managers completion* 278kt 10 065kt 2030 long term Target -15% 2030 long term 2024 Target CLIMATE Target -50% 50% -57.3% -56.8% -24.4% -24.7% 67.4%
Slide 9: 2024 order intake
2024 order intake > Outstanding order intake level, notably Order intake by fueled by large orders contract unit value > 16 large(a) orders booked in Q4 2024 €m > 35 large(a) orders booked in 2024 (vs. 25 in 2023) Reported growth: +9.3% > 2024 book-to-bill of 1.23, and 1.28 Organic growth: +6.4% exc
Slide 10: 2024 sales growth
2024 sales growth > Scope and currency impact Drivers of sales change > Scope impacts resulting from: Reported growth: +11.7% ▪ Acquisitions of Imperva and Tesserent (CDI), Cobham €m AeroComms (Aero), Getsat & DRT (Defence): €749m Organic growth: +8.3% ▪ Divestment of Aeronautical Electrical Systems
Slide 11: 2023 to 2024 Adjusted EBIT bridge
2023 to 2024 Adjusted EBIT bridge Marketing €m +329 R&D Scope, & sales Equity G&A Restructuring currency and affiliates 2,419 pensions -64 -61 -32 -11 2,132 -33 Gross margin +159 Naval Group: 2 Scope: +162 Others: -35 Currency: 2 Pensions: -5 2023 2024 Adjusted EBIT Adjusted EBIT Note: The definitio
Slide 12: Aerospace: 2024 key figures
Aerospace: 2024 key figures Change €m 2024 2023 Total Organic Order intake 6,434 5,606 +15% +14% Sales 5,471 5,221 +4.8% +2.9% Adjusted EBIT 391 369 +6.0% -13.9% in % of sales 7.2% 7.1% > Order intake up double-digit vs. 2023 notably driven by several large orders booked in Q4 in Space > Avionics or
Slide 13: Defence: 2024 key figures
Defence: 2024 key figures Change €m 2024 2023 Total Organic Order intake 14,723 13,944 +6% +5% Sales 10,969 9,628 +13.9% +13.3% Adjusted EBIT 1,432 1,270 +12.7% +13.0% in % of sales 13.1% 13.2% © Dassault Aviation K. Tokunaga > New record-high order intake despite high comparison basis due to jumbo
Slide 14: Cyber & Digital: 2024 key figures
Cyber & Digital: 2024 key figures Change €m 2024 2023 Total Organic Sales 4,024 3,504 +14.8% +1.4% Adjusted EBIT 585 491 +19.2% -0.8% in % of sales 14.5% 14.0% > Significant scope impact mainly linked to the acquisition of Imperva > Sales organic growth up low-single digit, as expected, with contras
Slide 15: Summary adjusted P&L: from Adjusted EBIT to Adjusted net income
Summary adjusted P&L: from Adjusted EBIT to Adjusted net income €m 2024 2023 Adjusted EBIT 2,419 2,132 Cost of net financial debt and other financial results (131) (36) Finance costs on pensions and other employee benefits (49) (76) Income tax (427) (370) Effective tax rate 20.4% 20.1% Minorities 67
Slide 16: Cash conversion: from Adjusted EBIT to Free Operating Cash Flow
Cash conversion: from Adjusted EBIT to Free Operating Cash Flow 2024, €m 114% Financial interest Income tax Equity 182 affiliates Capex 26 -140 -185 -22 Other -138 Change items in WCR Depreciation & Restructuring, Amortization: +479 lease depreciations, Net operating pensions… investment: -617 Adjus
Slide 17: 2024 cash conversion outperforming expectations
Adjusted net income conversion 2024 cash conversion into Free operating cash-flow outperforming expectations 162% 185% 115% 107% 114% > 2024: solid cash conversion 2,515 2,527 98% performance, above 100% 2,026 2,027 2,142 > Strong order intake, especially in Defence 113% 1,900 1,880 1,768 markets 1,
Slide 18: Movement in net debt over 2024
Movement in net debt over 2024 €m Net debt Net debt at 31 Dec 23 at 31 Dec 24 Free operating cash-flow from Dividends discontinued +359 paid New leases +2,142 operations (IFRS16) Others -116 Acquisitions & disposals -708 -143 -388 -3,044 -4,190 Free operating Out of which: Out of which cash-flow fro
Slide 19: Adjusted EPS and dividend
Adjusted EPS and dividend Adjusted EPS and > Adjusted EPS has more than doubled dividend per share since 2020 40% € 40% 40% > Proposed 2024 dividend up 9% at 40% €3.70 per share(a) > Pay-out ratio confirmed at 40% 40% (a) xx% Pay-out ratio a. Subject to approval by the 16th May 2025 Annual General M
Slide 20: Table of contents
Table of contents 01 02 03 04 2028 strategy & Introduction to Thales FY 2024 results 2025 priorities & outlook financial trajectory1 1Presented at the Capital Markets Day held on November 14, 2024 20
Slide 21: 2025 Key priorities
2025 Key priorities Continued ramp up to capture market 1 growth 2 Restoring Space profitability Sustained differentiation through 3 innovation Delivering strong value creation from 4 recent acquisitions 21
Slide 22: 1. Continued ramp up to capture market growth
1. Continued ramp up to capture market growth EXPANDING PRODUCTION CAPACITY ATTRACTING & RECRUTING TOP TALENT Several capacity expansions completed so far Strong brand awareness 1 million candidates in 2024 Rafale equipment Defence Radar Recruitment with a focus on high expertise roles x3 x3 c.
Slide 23: 2. Restoring Space profitability
2. Restoring Space profitability > Leveraging adaptation plan to drive profitability recovery Key measures: – ~ 1,300 positions impacted, of which 1,000 in France – Teams redeployment internally (engineering, industry) – Cost savings (structure, supply chain) Finalizing adaptation plan by early
Slide 24: 3. Sustained differentiation through innovation
3. Sustained differentiation through innovation THALES IS A WORLD-CLASS INNOVATOR… … ACCELERATING ON TRUSTWORTHY AI Critical mass in R&D cortAIx: Thales AI accelerator – 33,000 Thales employees – 800 AI experts by the end of 2025 and ~100 Phd students – €4.2Bn yearly investment (20% of sales) –
Slide 25: 4. Delivering strong value creation from recent acquisitions
4. Delivering strong value creation from recent acquisitions CONTINUING SUCCESSFUL VALUE CONSISTENT M&A STRATEGY GOING CREATION OF RECENT ACQUISITIONS FORWARD S Already delivering strong operational Selective and pragmatic M&A performance - Strengthening core businesses: strategic and cultural fi
Slide 26: 2025 financial objectives
2025 financial objectives 1 2 3 Order intake Sales Adjusted EBIT margin(b) Book-to-bill +5% to +6%(a) 12.2% to 12.4%(a) above 1 organic growth, corresponding to €21.7 to €21.9 billion a. Based on March 2025 scope and foreign exchange rates. Assuming no new major disruptions of macroeconomic and geop
Slide 27: Table of contents
Table of contents 01 02 03 04 2028 strategy & Introduction to Thales FY 2024 results 2025 priorities & outlook financial trajectory1 1Presented at the Capital Markets Day held on November 14, 2024 27
Slide 28: Strategic priorities
Strategic priorities LEVERAGE REINFORCE DIFFERENTIATE REINFORCE STRENGTHEN PREMIUM PORTFOLIO PREMIUM THROUGH EMPLOYER OUR ESG TO DELIVER GROWTH POSITIONING TECHNOLOGY ATTRACTIVENESS LEADERSHIP • Maintained leadership • Combined delivery • Embracing technology • Investment in our • Protecting our soc
Slide 29: 80-90% of revenues exposed to fast growing markets with long-term visibility
1. 80-90% of revenues exposed to fast growing markets with long-term visibility… DEFENCE AEROSPACE CYBER & DIGITAL Defence ~5.5% Avionics ~8% Space ~2% Cybersecurity ~12.5% Digital Identity ~6% • Increased defence budgets and • Civil avionics: growth driven by • Increasing incidence of cyber focus o
Slide 30: …which combined with resilience enables strong development ambitions
1. …which combined with resilience enables to have strong development ambitions RESILIENCE DEVELOPMENT OPPORTUNITIES Wide-range portfolio in all domains > Presence in land, air, naval, joint, cyber, > Accelerate revenue growth through and space DEFENCE faster conversion of backlog into sales Platfor
Slide 31: Reinforcing our premium position to the benefit of our clients
2. Reinforcing our premium position to the benefit of our clients Delivery excellence: industrial capacity ramp-up, supply chain securitization 1 Lead in sustainability to protect our Lead in technical and non-technical societies, people, and the planet 7 2 innovation and co-innovation Constant upgr
Slide 32: Anticipating technological disruptions to win business revolutions
3. Anticipating technological disruptions to win business revolutions and enhance differentiation Sustained technological Scale enabling to work on a wide span of selected technologies leadership Thales as creator of Quantum technology Critical mass in R&D LONG TERM New technologies revolution Thale
Slide 33: Today, Thales is a front runner in trustworthy AI
3. Today, Thales is a front runner in trustworthy AI Tomorrow, AI will be embedded in all solutions to the benefit of our clients THALES CAPABILITIES IN AI NOW AI USE CASES IN THALES PRODUCTS / SYSTEMS Space-based sensors SENSING • Instant access to space observation Radars data • x3 discrimination
Slide 34: Attracting and recruiting the best talent
4. Attracting and recruiting the best talent A purpose-driven company… …Attracting… …And recruiting talent Our purpose 1,000,000 candidates >30,000 recruitments Thales among in 2024,+55% vs. 2020 from 2022 to 2024 the most attractive employers in several countries 60 partnerships with top universiti
Slide 35: Strategic focus on talent development to reach our delivery ambition
4. Strategic focus on talent development to reach our delivery ambition What we’ve done so far What we plan to do Rethink the way we learn to combine new technology potential and on-the-job learning pedagogy Allocate Training as a key investment >50% of learning by doing in time to accelerate delive
Slide 36: Ambition to become an ESG leader
5. Ambition to become an ESG leader, with a positive contribution to society and the environment Safer GREENER Greener More inclusive Ambition Keep citizens safe in both Reduce the environmental Grant universal and unbiased Address major societal physical and digital worlds impact of our customers a
Slide 37: A portfolio of businesses delivering attractive growth
A portfolio of businesses delivering attractive growth (€Bn) Organic sales growth Defence Avionics Space Cyber & Digital Thales CAGR CAGR 5-7% 6-7% CAGR CAGR CAGR 5-7% 2% 6-7% • Focus on • Growth in margin cybersecurity • OEM ramp up restoration • Fast growing • IFE demand biometrics M&A • Cobham so
Slide 38: A portfolio of businesses delivering attractive growth
A portfolio of businesses delivering attractive growth (€m) Adjusted EBIT growth Further margin increase Higher Costs reduction* R&D* Price*/ Mix Volumes • Operational 13 – 14% efficiency • Premium • Space recovery offering • Cost synergies on • Higher growth acquisitions on high-margin M&A 2,242 bu
Slide 39: Profitability mostly driven by Cyber & Digital expansion and Space recovery
Profitability mostly driven by Cyber & Digital expansion and Space recovery Adjusted EBIT MARGIN % DEFENCE AEROSPACE CYBER & DIGITAL +200-300 bps 16 - 17% +400-500 bps 14% 13% 13% 11 - 12% 13-14% Avionics 7%+ Space 11.6% Avionics 7% 1% Space 2023 2028 2023 2028 2023 2028 Note: 2023 figures are resta
Slide 40: Operating Profit to boost Adjusted EPS
Operating Profit to boost Adjusted EPS (€) Adjusted EPS growth +50 - 60%* • M&A • SBB *** 8.48 -0.3 8.2 Transport Increased +53% disposal operating profit ** 5.55 2018 2023 2023 Adj. EPS 2028 Adj. Adj. EPS Adj. EPS Post Transport EPS * Assuming stable tax regulations vs. 2023 in the countries where
Slide 41: In summary: Thales, a global tech leader
In summary: Thales, a global tech leader in Defence, Aerospace, and Cyber & Digital >€25Bn revenues Attractive employer €5Bn annual R&D budget by 2028 for top talent by 2028 100% premium Active portfolio management Sustainability leader and unique portfolio & capital allocation 41
Slide 42: Appendix
Appendix 42 42
Slide 43: A performance recognised externally with improved ratings
A performance recognised externally with improved ratings 2030 OBJECTIVES Top 1% Inclusion Top ~1.5% Inclusion of 500,000 in CAC SBTI out of 21,000 #1 CAC 40 in CAC 40 ESG companies 1.5 index assessed index assessed 43
Slide 44: A strong set of focused businesses (1/2)
A strong set of focused businesses (1/2) Segment Sub-segment Civil Military 2024 sales (€bn) Market position Flight avionics(a) #3 worldwide including cockpit avionics, communications, electrical systems, ~2.4 (flight avionics) training and simulation Connected in-flight entertainment (IFE)(a)
Slide 45: A strong set of focused businesses (2/2)
A strong set of focused businesses (2/2) Segment Sub-segment Civil Military 2024 sales (€bn) Market position Cyber & Digital including cybersecurity, secure connectivity, payment services Cyber and identity & biometrics ~4.0 #1 worldwide & Digital 20% of 2024 sales 45
Slide 46: Aerospace segment: identity card
Aerospace segment: Sales by solutions Organic sales growth identity card 10% +12% 44% Connected in-flight +6% Flight avionics entertainment (IFE) +2% +3% and other aircraft 6% equipment Microwave 2 Global Business Units and services tubes -24% Avionics Space 2020 2021 2022 2023 2024 40% Space 21,100
Slide 47: Global leader in flight avionics and connected in-flight entertainment
Global leader in flight avionics and connected in-flight entertainment Sales by solutions Sales by end-market Sales by activity type 31% 11% Military platforms Microwave tubes 73% 48% €3.3bn €2.9bn(a) 52% €2.9bn(a) Flight avionics 50% Aftermarket Original and other (2024) (2024) support (2024) equip
Slide 48: Focus on Space
Focus on Space INFRASTRUCTURES SERVICES ~€2.2Bn 8,600(a) JV STRUCTURE ~€0.9Bn 3,300(a) JV STRUCTURE TAS SALES IN 2024 EMPLOYEES 67% Thales / 33% Leonardo TPZ SALES IN 2024 EMPLOYEES 67% Leonardo / 33% Thales (a) At the time of the CMD in November 2024. 20% 32% France & Italy 34% Telecom Commercial 5
Slide 49: Space: Telecom market moving to a complementary multi-orbit strategy
Space: Telecom market moving to a complementary multi-orbit strategy Average project size END-USER’S SERVICES GEO 36,000 km • Broadcast • TV (video) €150-500m • Adapted to hotspot • Continental coverage • High latency • Exposure to radiation Broadband MEO • Connectivity in • unserved areas 5,000-12,
Slide 50: Focus on Space: path back to profitability
Focus on Space: path back to profitability • Adaptation plan concerning 1,300 Adjusted EBIT MARGIN % jobs • Teams redeployment (Engineering, Industry) • Cost savings (Structure, Supply Chain) Integration of inflation in new Telecom contracts 7%+ Space Inspire R&D completion Business growth 1% 2023 G
Slide 51: Defence segment: identity card
Defence segment: identity Sales by solutions Organic sales growth card 25% +13% Communications +6% +7% +4% 43% ~35,400(a) employees Sensors -2% in 36 countries 23% Mission Systems 2020 2021 2022 2023 2024 Main industrial footprint 9% Australia, Canada, France, Netherlands, UK Effectors €11.0bn 2024
Slide 52: Thales on board the Rafale
Thales on board the Rafale ~25% Share of Thales equipment in Rafale’s value SENSORS COMMUNICATIONS MISSION SYSTEMS EFFECTORS 52
Slide 53: Ensuring Naval superiority
Ensuring Naval superiority ~20% Share of Thales equipment on naval platforms SENSORS COMMUNICATIONS MISSION SYSTEMS EFFECTORS 53
Slide 54: Thales is favorably positioned on the growing markets
Thales is favorably positioned on the growing markets Global tensions have triggered an GROWTH DRIVERS increase in long-term defence spending Expect steady market growth to (re)build long-term capacities Eastern Increasing needs to prepare for a Europe possible high-intensity conflict North Western
Slide 55: Cyber & Digital (CDI) segment: identity card
Cyber & Digital (CDI) Sales by solutions Organic sales growth segment: identity card Cybersecurity c.40% +8% (a) Secure +4% c.16% Connectivity +2% +1% Digital Identity Payment A global leader: c.26% Services c.60% Identity Global #1 for 73% of revenues c.18% & Biometrics -6% 2020 2021 2022 2023 2024
Slide 56: Cybersecurity Global Products: our competitive position in a fragmented landscape
Cybersecurity Global Products: our competitive position in a fragmented landscape DATA SECURITY APPLICATION SECURITY Revenue Market Cap Rev Multiple Revenue Market Cap Rev Multiple Revenue Market Cap Rev Multiple $0.5Bn $7Bn 13X $3.8Bn $18Bn 5X $2.8Bn $13Bn 5X IAM Revenue Market Cap Rev Multiple $1.
Slide 57: A global cybersecurity leader in a new league since 2024
A global cybersecurity leader in a new league since 2024 CYBER DEFENCE - Reported in Defence PREMIUM SERVICES SOVEREIGN PRODUCTS Solid positions in key • Threat & risk evaluation • High assurance products & technologies products and services • Training & simulation • Trusted by key countries and • D
Slide 58: 2024 order intake by destination
2024 order intake by destination FY FY Change 9% 4% In € millions 2024 2023 Total Organic Near and Rest of the world Middle East France 6,229 6,132 +2% +1% United Kingdom 1,682 3,095 -46% -48% Rest of Europe 7,292 6,248 +17% +16% 24% 12% France Europe 15,203 15,476 -2% -3% Asia North America 2,796 2
Slide 59: 2024 sales by destination
2024 sales by destination FY FY Change 6% 5% In € millions 2024 2023 Total Organic Near and Rest of the world Middle East France 5,932 5,437 +9% +8% 10% United Kingdom 1,355 1,208 +12% +8% Asia Rest of Europe 5,155 4,578 +13% +11% Europe 12,442 11,223 +11% +9% 29% France North America 2,921 2,581 +1
Slide 60: 2024 Adjusted EBIT by operating segment
2024 Adjusted EBIT by operating segment Change €m / % of sales 2024 2023 Total Organic Aerospace 391 7.2% 369 7.1% +6.0% -13.9% Defence 1,432 13.1% 1,270 13.2% +12.7% +13.0% Cyber & Digital 585 14.5% 491 14.0% +19.2% -.8% Adjusted EBIT - operating segments 2,408 11.8% 2,130 11.6% +13.1% +5.2% Other
Slide 61: Organic sales growth per quarter
Organic sales growth per quarter 2021 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Aerospace Defence Cyber & Digital Total(a) a. Excluding Transport in all periods (Transport business classified as "discontinued operations" as of 01/01/2021 and disposed as of 31/05/2024). 61
Slide 62: Q4 2024 order intake by operating segment
Q4 2024 order intake by operating segment Q4 Q4 Change €m 2024 2023 Total Organic Aerospace 2,796 2,204 +27% +23% Defence 5,773 7,540 -23% -25% Cyber & Digital 1,127 993 +13% +5% Other 44 25 Total 9,739 10,761 -10% -12% 62
Slide 63: Q4 2024 sales by operating segment
Q4 2024 sales by operating segment Q4 Q4 Change €m 2024 2023 Total Organic Aerospace 1,632 1,587 +2.8% -2.4% Defence 3,730 2,977 +25.3% +23.9% Cyber & Digital 1,110 986 +12.5% +4.1% Other 37 24 Total 6,508 5,574 +16.7% +13.0% 63
Slide 64: Summary of financial targets
Summary of financial targets 2023 – Base Year 2028 / Plan period ORGANIC SALES GROWTH CAGR* +5-7% Defence +6-7% Avionics +5-7% Space +2% Cyber & Digital +6-7% Adjusted EBIT Margin (%) 11.6% 13-14% Defence 13% 13% Aerospace (Avionics/Space) 7% (11.6%/1%) 11-12% (13-14% / 7%+) Cyber & Digital 14% 16-1
Slide 65: Definition of non-GAAP measures and other remarks
Definition of non-GAAP measures and other remarks > Adjusted Net Income: net income, less the following elements, net of > Rounding of amounts in euros the corresponding tax effects: (i) amortization of acquired assets (PPA), (ii) expenses recorded in the income from operations or in In the context
Slide 66: Thales contact details
Thales 4 rue de la verrerie 92160 Paris Meudon 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 statements d