Defence contracts boost Thales revenues

It’s that time of the year again: annual results. Today was Thales.

And the figures are good: a 31% growth in orders hitting a record €18.9bn, up from €14.4 in 2014; a turnover of €14.1bn, up 8% from the 2014 figure of €13bn; and an adjusted net result of €809m, up 44% from the €562 registered in 2014.

Thales Australia's Hawkei

Thales Australia’s HawkeiD

Pascal Bouchiat, chief financial officer, says the growth in order intake was thanks to the group’s “capacity to win big contracts”. He stressed that 24 contracts worth more than €100m were signed in 2015, compared to 19 in 2014. Of these, four were worth €500m and were all in the defence and security sector and one, for London Transport, was worth €1bn. “The last time we signed a €500m contract was in 2011,” Bouchiat said, “so this is not something we achieve every year.” Two of the contracts concerned the sale of 24 Rafale combat aircraft each to Egypt and Qatar and one was for the French ComSat-NG military satellite.

The fourth of these €500m contracts was for the Hawkei 4×4 protected vehicle programme in Australia signed in early October 2015. The contract involves the delivery of 1,100 vehicles and over 1,000 trailers. The three and a half year production phase is scheduled to begin in mid-2017 with first deliveries expected toward the end of that year.

Total order intake in the defence and security sector grew 28% in 2015 to €9.7m up from €7.6m in 2014. Turnover in the sector grew 9% to €7.08m up from €6.48m a year earlier.

Patrice Caine, chairman and CEO, told FOB after the press conference that the group was on time and on schedule with its involvement in the French Army’s Scorpion ( Synergie du contact renforcée par la polyvalence et l’infovalorisation or close combat synergy reinforced by versatility and information valorisation) programme to replace old vehicles, introduce a single combat information system instead of the six currently in use, renovate the Leclerc main battle tank and optimise support. Thales is part of a consortium with Nexter and Renault Trucks Defense in this programme.

Caine also said that “in order to keep our technological leadership”, Thales invests heavily in research and development (R&D) with “20% of our turnover invested in R&D.