Thales: Defense and Aerospace Leadership Supports Durable Growth
Thales' business is well diversified, with 45% of revenue coming from civil and 55% from defense. Escalating global security concerns, intensified by the conflict in Ukraine, are driving structurally higher growth in the defense market. We anticipate this growth will be uninterrupted for at least several years, considering that many countries, particularly in Europe, have underspent since the end of the Cold War. Thales is strategically positioned to benefit, given its significant stakes in an array of major international defense projects. With around two-thirds of its defense revenue coming from Europe, Thales remains ideally positioned to benefit from Europe’s structural rearmament cycle, with defense spending expected to increase to an average of 3.5% of gross domestic product by 2035 from 2.1% in 2024.
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