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France's Thales posts higher quarterly sales and orders

France's Thales posts higher quarterly sales and orders
France's Thales posts higher quarterly sales and orders Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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By Tim Hepher

PARIS - France's Thales posted better-than-expected third-quarter revenues and new orders on Wednesday and said it expected to reach the upper end of its forecast for annual sales.

Europe's largest defence electronics maker said it had won 4.24 billion euros ($4.2 billion) of new orders in the third quarter, up 36% on a like-for-like basis, and generated 4.04 billion euros of revenues, up 8.5%.

Revenues were boosted by demand for cybersecurity systems and a rebound in the biometrics business of the former Gemalto, now known as Thales' Digital Identity and Security.

That came despite continued problems with getting chip deliveries, which Chief Financial Officer Pascal Bouchiat predicted would "certainly be a subject of vigilance in 2023".

Major new orders included a deal for in-flight entertainment systems for the future A350 fleet of Dubai's Emirates, a South Korean communications satellite and an export order for the company's Sea Fire early-warning naval radar.

Thales reaffirmed 2022 targets including like-for-like sales growth of between 3.5% and 5.5% but said it was increasingly confident of hitting the upper part of that range.

Analysts were on average expecting a third-quarter order intake of 3.63 billion euros and revenues of 3.87 billion, according to a company-compiled consensus.

Thales said it continued to face snags in supply chains and labour shortages as well as inflation and the impact on its businesses of Russia’s invasion of Ukraine, which it continued to estimate at 100 million euros.

However, Bouchiat said Thales would benefit from any continued weakness of the euro.

"I am very happy to see a strong dollar ... it is a booster of competitivity when we export," he told reporters.

Thales said it would scale up recruitment teams and focus on passing increases in its purchasing costs to its customers.

($1 = 1.0047 euros)

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