Thales (HO) Q4 2024 earnings summary

Executive summary

• Achieved record order intake of €25.3 billion in 2024, with sales reaching €20.6 billion, both exceeding guidance and driven by strong defense demand.

• Organic sales growth reached 8.3%, with adjusted EBIT up 13.4% to €2,419 million (11.8% margin), and adjusted net income grew 7.4% to €1.9 billion.

• Free operating cash flow from continued activities increased by 9% to €2,142 million, with a cash conversion ratio of 114%.

• Board proposes a 9% dividend increase to €3.70 per share (40% payout), with €0.85 interim paid in December 2024 and €2.85 to be paid in May 2025.

• Successful integration of Imperva and Cobham AeroComms, both contributing positively.

Financial highlights

• Order intake rose 9% to €25,289 million; book-to-bill ratio at 1.23; order book at year-end reached €50.6 billion, up 12% from 2023.

• Sales increased 11.7% to €20,577 million; organic growth at 8.3%.

• Adjusted EBIT margin improved to 11.8%; adjusted net income at €1.9 billion; EPS rose 9% to €9.24 per share.

• Free operating cash flow conversion at 114% of adjusted net income.

• Net debt decreased to €3,044 million at year-end 2024, supported by robust cash generation and asset disposals.

Outlook and guidance

• 2025 targets: book-to-bill above 1, organic sales growth of 5%-6% (€21.7–€21.9 billion), and adjusted EBIT margin of 12.2%-12.4%.

• High cash conversion ratio (95%-105%) expected to be maintained.

• Defence organic growth expected at 6%-7% for 2025, with aerospace mid-single-digit, space flat to low single-digit, and cyber/digital mid-single-digit.

• Space segment targeted to reach operating break-even in 2025 and 7%+ EBIT margin by 2028.

• Temporary French tax changes in 2025 to increase tax expense by ~€80 million and impact EBIT by ~€8 million.