Thales Books Strong Orders as Defense, Aerospace Growth Continues — Update

By Mauro Orru

Thales logged higher orders in the first half, with strong growth at its defense and aerospace units as demand for military equipment and satellite systems remained high.

The French aerospace-and-defense company reported an order intake of 12.47 billion euros ($14.23 billion), up 21% in reported terms and 22% organically, a closely watched rate that shows performance at constant scope and exchange rates. Analysts had forecast orders of 10.48 billion euros, according to a market consensus provided by the company.

Thales's defense business, which remains the largest contributor to orders, brought in 7.35 billion euros in bookings, up 28% both in reported terms and organically. The company bagged an order from the Australian government for 268 Bushmaster protected mobility vehicles, an order from a Middle Eastern country for several air surveillance systems as well as a contract with Greece to modernize a system for Hydra-class frigates.

The contracts reflect healthy demand for military hardware after Russia's invasion of Ukraine prompted European governments to raise defense spending. Last week, Thales said it had signed a letter of intent to work with several European defense groups on a system to strike down ballistic missiles, which can travel at hypersonic speeds above the atmosphere. The companies said they planned to enter into a binding agreement within three months.

Earlier this month, Thales said it would buy a stake in Exail Technologies before making a bid that values the company at nearly $4.5 billion including debt, part of efforts to strengthen its underwater warfare offering. Exail makes drones for underwater and surface operations.

In June, Thales agreed to work with carmaker Renault to make drone munitions at scale, a boost to the French defense industry as the North Atlantic Treaty Organization member seeks to shore up its production capabilities.

Thales's aerospace operations contributed 3.26 billion euros to orders, growing 23% in reported terms and 24% organically. Orders at the group's smaller cyber and digital business slipped 1% organically to 1.81 billion euros.

The group secured a contract with a satellite communications operator in Qatar for a geostationary telecommunications satellite. It also won a contract with the European Space Agency to develop two new satellites.

Sales increased 6.7% in reported terms and 7.8% organically to 10.95 billion euros against analysts' estimate of 10.96 billion euros.

Thales said earlier this month that it expected to record a charge after Germany scrapped a project to procure F126 frigates. Dutch shipbuilder DSNS was the prime contractor for the project and Thales one of the subcontractors before Berlin started transferring the project to Rheinmetall due to budgetary issues and delays.

Thales said the charge would have no effect on its adjusted earnings before interest and taxes and adjusted net profit. However, it hit net profit by 331 million euros in the first half.

Adjusted EBIT grew to 1.37 billion euros from 1.25 billion euros, generating a 12.5% margin. Net profit fell 27% to 485 million euros. On an adjusted basis, net profit increased 13% to 990 million euros. Free operating cash flow came in at nearly 1.87 billion euros.

Analysts had forecast adjusted EBIT of 1.32 billion euros, an adjusted EBIT margin of 12.1%, adjusted net profit of 908 million euros and free operating cash flow of 470 million euros, according to the consensus.

For the year, Thales said it continued to expect organic sales growth between 6% and 7%, with an adjusted EBIT margin between 12.6% and 12.8%.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

July 23, 2026 02:01 ET (06:01 GMT)