THALES 26 July 2017
www.thalesgroup.com
▌ Aerospace
Avionics: continued positive dynamics for cockpit avionics and in-flight entertainment and connectivity
Space: slow start of the year in civil telecom
▌ Transport
Strong demand in both emerging markets and Europe
▌ Defence and security
Geopolitical tensions and security threats
Improved outlook in mature markets despite
ongoing budget pressures Opportunities in emerging markets
▌ Solid order intake, driven by multiple large contracts
▌ Robust sales growth, ahead of full-year target
▌ Significant increase in profitability, supported by all segments
▌ Acceleration of R&D investments and digital transformation initiatives
Continued focus on profitable and sustainable growth
Order intake Sales EBIT and EBIT margin(b)(a)
€m +10%(a)€m
5,4235,972
+5.9%
6,8467,241
€m
551
8.1%
+17%(a)
+0.9 pts(a)
637
8.8%
H1 2016 H1 2017
H1 2016 H1 2017
H1 2016 H1 2017
Adjusted net income(b) Free operating cash-flow(b) Net cashposition€m
367
+15%
424
€m +171
45
216
€m
1,978
1,439
+855
2,366 2,294
H1 2016 H1 2017
Organic: at constant scope and exchange rates
The definition of all non-GAAP measures can be found in appendix
H1 2016 H1 2017
Dec 15 June 16 Dec 16 June 17
▌ Good order intake momentum, up 10%
Order intake by contract unit value€m
▌ 8 large(a) orders booked in H1 172 telecommunication satellites
In-flight entertainment for a large North American airline
4 advanced defence systems in all milieus (air, naval, ground) Management and support of French MoD headquarter information and communication systems (Balard)
1,180 | ||
521 | Unit value > €100m €10m | |
1,531 | 1,417 | |
3,371 | Unit value | 3,375 |
+10% 5,972
▌ Solid base of smaller orders
H1 2016 H1 2017
With a unit value over €100m
▌ Confirmed growth in mature markets
Organic(a)
sales growth +15.1%▌ Continuous high growth in
emerging markets+15%, after +14% in H1 2016
▌ Low sales growth in Q2, as expected
Cutoff effects and strong bases
of comparison
+6.8%
+2.2%Mature markets
+14.2%
Emerging markets
+8.9%
+5.9%Total
In this presentation, "organic" means "at constant scope and exchange rates"
H1 2016 H1 2017
H1 2017
H1 2016
change
€m
% of sales
€m
% of sales
total
organic
Sales
7,241
6,846
+5.8%
+5.9%
(a)
Gross margin
1,741
24.0%
1,623
23.7%
+7%
+7%
Indirect costs (a)
(1,154)
-15.9%
(1,107)
-16.2%
+4%
+3%
o/w R&D expenses
(360)
-5.0%
(325)
-4.7%
+11%
+9%
o/w Marketing & Sales expenses
(521)
-7.2%
(515)
-7.5%
+1%
+0%
o/w General & Administrative expenses
(274)
-3.8%
(268)
-3.9%
+2%
+2%
Restructuring costs
(24)
-0.3%
(34)
-0.5%
-31%
-31%
Share of net result of equity-accounted affiliates, excluding Naval Group (ex DCNS)
48
0.7%
50
0.7%
-4%
+3%
EBIT before Naval Group (ex DCNS)
610
8.4%
532
7.8%
+15%
+17%
Share of net result of Naval Group (ex DCNS)
27
0.4%
20
0.3%
+37%
+37%
EBIT
637
8.8%
551
8.1%
+16%
+17%
(a) Gross margin and indirect costs items adjusted for impact of expenses related to acquisitions
€m
551Scope, currency & pensions
Operational performance
Restructuring expenses: down
+11
R&D:
up
-31
Marketing
& sales: stable
0
Naval Group
(ex DCNS)
+7
H1 2016: +20
H1 2017: +27
637-16 +115
Scope: -7
Currency: -2
Pensions: -7
H1 2016 EBIT H1 2017 EBIT€m
H1 2017
H1 2016
change
total
organic
Aerospace
263
9.2%
239
9.0%
+10%
+11%
Transport
6
0.9%
(12)
-1.6%
NM
NM
Defence & Security
374
10.3%
334
9.8%
+12%
+14%
EBIT - operating segments
644
8.9%
561
8.2%
+15%
+17%
Other
(34)
(29)
EBIT - excluding Naval Group
610
8.4%
532
7.8%
+15%
+17%
Naval Group
27
20
EBIT - total
637
8.8%
551
8.1%
+16%
+17%
▌ Recovery of Transport on track
▌ Solid performance of Aerospace and Defence & Security segments
€m
H1 2017
H1 2016
change
total
organic
Order intake
2,238
2,218
+1%
+1%
Sales
2,872
2,667
+7.7%
+7.2%
EBIT
263
239
+10%
+11%
in % of sales
9.2%
9.0%
+0.2 pts
+0.3 pts
▌ Good momentum in avionics and in-flight entertainment (IFE)
order intake, offset by slowdown in Space
▌ Sales growth driven by commercial aircraft avionics, IFE and Space
▌ Increase in R&D investments
€m
H1 2017
H1 2016
change
total
organic
Order intake
662
507
+31%
+31%
Sales
711
717
-0.9%
-0.1%
EBIT
6
(12)
N/M
N/M
in % of sales
0.9%
-1.6%
+2.5 pts
+2.6 pts
▌ Solid order intake
▌ Flat sales growth, due to high comps (H1 2016 sales
organically up 29% compared to H1 2015)
▌ Margin recovery on track
€m
H1 2017
H1 2016
change
total
organic
Order intake
3,035
2,670
+14%
+14%
Sales
3,631
3,424
+6.1%
+6.5%
EBIT
374
334
+12%
+14%
in % of sales
10.3%
9.8%
+0.6 pts
+0.7 pts
▌ Strong order intake momentum, notably in air and naval systems, and information and communication systems
▌ Sales growth driven by wide range of businesses
▌ Increased profitability driven by top line growth, savings on structure costs, as well as lower restructuring
THALES SA published this content on 26 July 2017 and is solely responsible for the information contained herein.
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