Leading the way was the recovering demand for military hardware and airline parts, as France’s Thales (TCFP.PA) reported 7.5% underlying growth in nine-month revenues to 12.854 billion euros ($13.62 billion) on Tuesday.
The most significant defense electronics manufacturer in Europe, which also produces digital security tools and systems for civil aviation, said that its order intake dropped 18% from the previous year when an order for Rafale fighters from the United Arab Emirates helped it.
Even though nine-month orders came in below revenues at 12.370 billion euros, Thales maintained its full-year expectations, which included a book-to-bill ratio over one.
Although civil aviation had demonstrated a “strong commercial dynamic” this year, the order comparison had also suffered from extremely high demand for the company’s satellites in 2022, according to Chief Financial Officer Pascal Bouchiat.
Bouchiat told reporters, “I have no doubt that we will be above one (in full-year book-to-bill),” noting that Thales orders were typically weighted towards the latter quarter.
He also stated that the second tranche of a recent Indonesian contract for eighteen Dassault-built French Rafale fighters—of which Thales provides the radar—should show up in the fourth quarter.
Within the Digital Identity and Security segment, Thales reported that robust growth in cybersecurity and biometrics was counterbalanced by a harmful increase in SIM cards and payments, particularly in Asia.
According to Bouchiat, the digital division seems to have overcome a recent shortage of electrical chips, but there are still supply shortages in the aerospace sector.
In general, he said, the supply chain for hardware and mechanical components is still under a lot of strain in several nations, which has an impact on radars and satellites.
The plight of small suppliers who were unable to make sufficient investments during the epidemic and are currently finding it challenging to meet demand is something Thales is closely monitoring. Thales has occasionally been required to make advances or offer further assistance.
Bouchiat stated, “We remain very vigilant,” and expressed his optimism that things will gradually stabilize by 2024.
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