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French group Thales' nine-month sales growth accelerates on defence wins

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French group Thales' nine-month sales growth accelerates on defence wins
FILE PHOTO: The logo of French defence and electronics group Thales is seen at the company's headquarters in Neuilly, near Paris, May 20, 2008. REUTERS/Charles Platiau/File Photo   -   Copyright  Charles Platiau(Reuters)
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PARIS (Reuters) – Thales <TCFP.PA> expects to reach the top end of its financial goals for the year, the French company said as it posted accelerating nine-month revenues led by defence activities.

Europe’s largest defence electronics group said on Thursday that nine-month sales had risen 6.2 percent – or 7.9 percent on a like-for-like basis – to 10.873 billion euros (£9.54 billion).

Its fresh order intake reached 9.468 billion euros, up 7 percent from the same period last year, thanks in part to radio contracts for the London Underground and French military.

“The solid performance over the first three quarters of the year increases our confidence in Thales’ ability to meet its full-year objectives,” Chief Executive Patrice Caine said in a statement.

Order intake and revenues accelerated in the third quarter, though the basis for comparisons will be less favourable in the final three months, Finance Director Pascal Bouchiat said.

“Even so, the situation at the end of September means that for the full year we will be at the high end of the ranges we published on sales and profitability,” he told reporters.

Thales, in which the French state owns 26 percent and Dassault Aviation <AVMD.PA> 25 percent, is targeting underlying growth of 4-5 percent in 2018 sales and a 19-22 percent jump in operating profit to between 1.62 and 1.66 billion euros.

The group – which provides military radar, civil air traffic control systems and rail infrastructure – is in the process of buying chipmaker Gemalto <GTO.AS> for 4.8 billion euros to become a leading player in digital security.

Earlier this month, Thales said it had offered concessions to address antitrust concerns after the European Commission began a full-scale investigation, citing fears that the deal could push up prices.

Bouchiat said this would involve selling activities in GP HSMs (general-purpose hardware security modules), which generate keys and encrypt and decrypt data. The business accounts for 90 million euros of sales and 300 staff.

“Selling this activity and finding a buyer in satisfactory conditions will necessarily take a little time,” he said.

Thales reiterated it aimed to finalise the deal in the first quarter of next year rather than by the end of 2018.

(Reporting by Tim Hepher, Cyril Altmeyer; Editing by Sudip Kar-Gupta)

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