Thales Reports Full Year Results for 2023, Strong Financial Performance and Guidance for 2024

Thales Reports Record Financial Performance for 2023 and Outlines Objectives for 2024

Paris, France-based Thales, a global technology giant, published its financial results for the entire year 2023 and unveiled its strategic goals for the next fiscal year. The company's financial performance was highlighted by record-high order intake and sales, as well as improved profitability.

Key Highlights

  • Organic sales growth of 7.9% exceeded expectations, with notable growth in the aerospace and defense industries.
  • Strategic investments and acquisitions, such as Tesserent, Cobham Aerospace Communications, and Imperva, complemented the company's portfolio.
  • Robust cash flow generation reduced net debt, fostering further expansion and innovation.

Detailed Financial Results

  • Order intake: �23.1 billion, book-to-bill ratio of 1.26.
  • Sales: �23.1 billion, up 7.9% organically.
  • EBIT margin: 11.6% improvement to 11.6%.
  • Adjusted net income: �1.768 billion, up 14%.
  • Free operating cash flow: �2 billion, even after capital deployment.

Financial Outlook for 2024

Thales expects high single-digit to low double-digit growth in the avionics, space, defense & security, and digital identity and security (DIS) segments.

The company also announced plans to recruit approximately 8,500 new employees to support expansion and innovation. The dividend payout ratio is targeted at 40%, with plans to maintain a solid investment-grade profile.

Thales faces challenges in the space sector, including market decline, supply chain issues, and the need to redeploy 1,300 positions. The company highlights new satellite technologies and defense projects as growth opportunities.

In the defense and security segments, record-high order intake and organic sales growth were recorded. The company expects high-single-digit to low-double-digit business growth for global security products by 2024.

Despite a solid performance in 2023, the space business did not seek additional growth and instead focused on restoring profitability. The revenue drop in the DIS segment is expected to rebound in the second half of 2024.

The management team discussed plans to complete the current share buyback program by the end of March and consider future capital allocation decisions. They also highlighted short-term visibility for the smart card business and confidential constellation projects that complement the geostationary satellite market.

Thales has demonstrated a solid financial performance in 2023 and is well-positioned for continued growth and innovation in the coming year. With strategic investments in research and development, a focus on sustainability, and plans to expand the workforce, the company is poised to strengthen its market position and achieve its financial objectives for 2024. Pascal Bouchiat, CFO of Thales, discussed expectations for mid-single-digit organic growth in the Defense & Security business for 2024. He also talked about completing the current share buyback program by the end of March and making future capital allocation decisions with the board. On the space business, he said that they have a contingency plan to adapt their activities, including the redeployment of 1,300 positions. He also highlighted that they have a plan to integrate the Cobham acquisition in Q2 2024. Finally, he said that they expect high-single-digit to low-double-digit business growth for global security products by 2024. Overall, Thales has had a strong year in 2023, with good financial results and a positive outlook for the future. The company's focus on sustainability, innovation, and expansion positions it well for continued success in the coming years. This concludes the generated text.

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