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Thales reports its 2023 full-year results

05/03/2024

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Order intake1: 23.1 billion, slightly down 2% ( 0.2% on an organic basis2)

Sales: 18.4 billion, up 4.9% ( 7.9% on an organic basis)

EBIT3: 2,132 million, up 10.2% ( 10.9% on an organic basis)

Adjusted net income, Group share3: 1,768 million, up 14%

Consolidated net income, Group share: 1,023m, down 9% due to an exceptional expense linked to the transfer of risk relating to pension obligations in the United Kingdom to a third party

Free operating cash flow3: 2,026 million, 115% of adjusted net income, Group share

Dividend4 of 3.40, up 16%

Non-financial performance: Thales achieved or over-achieved all its 2023 targets

2024 objectives:

Book-to-bill5 above 1

Organic sales growth of between 4% and 6%, corresponding to sales of between 19.7 billion and 20.1 billion

EBIT margin between 11.7% and 12%

Cash flow generation target: conversion ratio of adjusted net income to free operating cash flow close to 100% in 2024

Thales's Board of Directors (Euronext Paris: HO) met on March 4, 2024 to review the 2023 financial statements6.



Once again this year, Thales has achieved remarkable performances.



Our excellent sales momentum continued in 2023, with the order intake once again exceeding 23 billion and the order book reaching an all-time high.



Organic growth in sales was higher than expected at 7.9%, driven in particular by the dynamism of the civil aeronautics activities.



This strong growth resulted in an even stronger EBIT improvement, which grew by nearly 11%, reflecting the quality of the Group's business model and of its operating leverage.



Finally, Thales once again generated high levels of cash, in excess of 2 billion.



These results reflect the trust our customers place in us, the commitment of our employees and the excellence of our technologies. I would like to thank all our teams for their contribution and dedication.



Building on these strengths, the Group worked hard in 2023 to prepare for the future.



In this regard, two major acquisitions will enable us to further strengthen our offers in key markets. Cobham Aerospace Communications in avionics, and Imperva in cybersecurity will provide Thales with very high added value technological bricks that are strongly complementary with our current portfolio of solutions.



Preparing for the future also means setting ever-more-ambitious CSR goals. The year 2023 marked the end of an extremely positive cycle in which we achieved or exceeded all our multi-year objectives and obtained recognition from leading non-financial rating agencies. We will announce our new ambitions in this area in the second half of 2024.



Finally, preparing for the future means continuing to increase our R&D investments so we can continue to develop our skills and technologies, which are our greatest asset.



We are therefore looking ahead to 2024 with optimism, confident in the quality of our fundamentals, the strength of our positioning and the importance of our contribution to the major societal challenges of our time.



Patrice Caine, Chairman and Chief Executive Officer

Key figures

In accordance with standard IFRS5, the financial data for the transport operating segment for 2022 and 2023 have been classified under discontinued operations following entry into exclusive negotiations with Hitachi Rail with a view to disposing of this business.

Order intake for the 2023 financial year was slightly down 2% compared with 2022 at 23,132 million but rose by 0.2% on an organic basis (i.e. at constant scope and exchange rates). As a reminder, in 2022 the Group benefited from signing a major contract for the supply of 80 Rafale aircraft to the United Arab Emirates. Sales momentum remained strong in 2023, with continued robust demand in the Defence & Security segment and a significant recovery in Aeronautics, particularly in aftermarket sales. The Group won a major 1.8 billion contract with the UK Ministry of Defence to ensure the long-term availability and resilience of Thales equipment on the UK fleet - the MSET (Maritime Sensor Enhancement Team) contract. At December 31, 2023, the consolidated order book stood at 45 billion, a new all-time high, up more than 4.5 billion year-on-year.

Sales reached 18,428 million, up 4.9% from 2022 in total change, and up 7.9% in organic change, driven in particular by strong momentum in civil aeronautics activities.

For 2023, the Group posted EBIT7 of 2,132 million (11.6% of sales), compared to 1,935 million (11.0% of sales) in 2022, up 10.2% in total change, and 10.9% in organic change.

At 1,768 million, adjusted net income, Group share7 was up 14% compared to 2022.

Consolidated net income, Group share amounted to 1,023 million, down 9% from 2022. This fall was due to a non-recurring expense of 349 million recorded in 2023 for the implementation of insurance coverage for its obligations under the Thales UK Pension Scheme as part of the agreement entered into with Rothesay in December 2023 concerning the transfer of these obligations.

The free operating cash flow7 stood at 2,026 million compared to 2,527 million in 2022. The conversion ratio of adjusted net income, Group share to free operating cash flow was 115% (162% in 2022). This once again exceptional performance reflects the excellent order intake, phasing effects on cash inflows related to contract execution, and continued progress in the action taken since 2020 under the CA$H! initiative.

In this context, the Board of Directors decided to propose the payment of a dividend of 3.40 per share, corresponding to a payout ratio of 40% of the adjusted net income, Group share, per share, an increase of 16% compared to 2022.

Order intake

Order intake for the 2023 financial year totaled 23,132 million, slightly down by 2% from 2022 in total
LINK: https://www.thalesgroup.com/en/group/investors/press_release/thales-re...
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