2017 Full-Year results

06.03.2018 Investors

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Thales's Board of Directors (Euronext Paris: HO) met on 5 March 2018 to close the 2017 financial statements (1).

Patrice Caine, Chairman & Chief Executive Officer, stated: 2017 was another record-breaking year for Thales. The Group exceeded all its annual financial targets. As expected, order intake remained high. It was comparable to the 2016 level if we remove the exceptional Rafale contract for India that was booked in September 2016. For the second consecutive year, organic sales growth exceeded 5%, driven by a solid performance across all of our businesses. At 9.8% - a level never achieved before by the Group - our operating profitability came in at the upper range of the target set in April 2014.

This financial performance was made possible by the dynamism of our commercial actions, the pursuit of our competitiveness improvement plans, the strengthening of our technological leadership, and more generally, by the commitment of our 65,000 employees, all of whom I would like to thank today on behalf of the Board of Directors.

At the same time, Thales is continuing to prepare for the future and is stepping up its growth strategy: in 2017, we increased our R&D investments by 9% and further strengthened our expertise in artificial intelligence, with the set up of a new research laboratory in this field, as well as in big data, thanks to the acquisition of Guavus, a pioneer in real-time big data analytics.

We are actively preparing the acquisition of Gemalto, which is expected to close in the second half of 2018. This project will cement our position as a leader in the digital transformation of our industries and customers, and enable us to build a global leader in digital security.

Order intake: 14.9 billion, down 9% on an organic basis (2)

Sales: 15.8 billion, up 7.2% on an organic basis

EBIT (3): 1,543 million, up 14% (up 16% on an organic basis)

All 2017 objectives exceeded

Adjusted net income, Group share (3): 982 million, up 9%

Consolidated net income, Group share: 822 million, down 13%

Free operating cash flow (3): 1,365 million, 139% of adjusted net income

Dividend (4) up 9% to 1.75

Gemalto acquisition project on track

2018 objectives: organic sales growth between 4% and 5% (5) ; EBIT between 1,620 and 1,660 million

In millions, except earnings per share and dividend (in ) 2017 2016 Total change Organic change

Order intake 14,920 16,514 -10% -9%

Order book at end of period 31,914 33,530 -5% -3%

Sales 15,795 14,885 6.1% 7.2%

EBIT (3) 1,543 1,354 14% 16%

in % of sales 9.8% 9.1% 0.7 pt 0.8 pt

Adjusted net income, Group share (3) 982 897 9%

Consolidated net income, Group share 822 946 -13%

Adjusted net income, Group share, per share (3) 4.64 4.25 9%

Dividend per share (4) 1.75 1.60 9%

Free operating cash flow (3) 1,365 954 43%

Net cash at end of period 2,971 2,366 26%

We are pleased to invite you to participate in our conference call in English:

Tuesday, 28 February 2016 at 8:30 am (CET)

Dial-in number from France: 33 (0) 1 70 77 09 40

International dial-in number: 44 (0) 203 043 24 41

It will be also possible to follow the conference call through a webcast by using the following link: http://edge.media-server.com/m/p/ffqqari8

If you are unable to listen to the call live, a digital replay will be available a few hours after the end of the conference call and will remain available for 90 days. To access the replay, please dial 33 (0) 1 72 00 15 00 or 44 (0) 203 367 94 60 (code 306050#).

Notes

(1) At the date of the press release, the audit procedures have been completed and the Statutory Auditors report was in the process of being issued.

(2) organic : on a constant scope and exchange rate basis

(3) Non-GAAP measures, see definitions in the Appendices to the press release, page 13.

(4) Proposed to the Shareholders Meeting on 23 May 2018.

(5) Compared to 2017 pro forma IFRS 15 sales.

LINK:	https://www.thalesgroup.com/en/worldwide/press-release/2017-full-year-...
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