Thales (THLEF) Q4 2024 Earnings Call Highlights: Record Order Intake and Strong Defence Performance

Thales, the global leader in advanced technologies, wrapped up 2024 with a bang, reporting record order intake and strong defence performance during its Q4 earnings call. The company's exceptional commercial momentum led to a record order book, providing unprecedented visibility for all its activities. Let's dive into the key highlights from the call.

Record Order Intake and Book-to-Bill Ratio

Thales' order intake for the 2024 financial year increased by 9% compared to 2023, reaching €25.3 billion. This impressive growth was driven by strong demand in the Defence segment and continued sustained momentum in the Aerospace segment. The company's book-to-bill ratio stood at 1.23, indicating that Thales is winning more orders than it is generating sales, which bodes well for future growth. Excluding Cyber & Digital, whose book-to-bill ratio is structurally equal to 1, the book-to-bill ratio was 1.28.

Sales Growth and Adjusted EBIT Margin

Thales' sales totaled €20.6 billion in 2024, up 11.7% from 2023, with organic growth of 8.3%. This robust growth reflects the solid performance of the Defence business throughout the year. The company's adjusted EBIT margin stood at 11.8% of sales, compared to 11.6% in 2023, an increase of 13.4% (+5.7% organic change).

Defence Segment Performance

Thales' defence segment shone in 2024, with exceptional momentum driven by 27 large orders. Some specific defence contracts and projects that contributed to this strong performance include:

1. Naval Group Contract: Thales won a contract worth €2 billion with Naval Group for the French Navy's FDI (Frigate de Défense et d'Intervention) program.
2. UK MoD Contract: Thales secured a contract with the UK Ministry of Defence (MoD) for the upgrade of the Royal Navy's Type 23 frigates, valued at over €1 billion.
3. Australian Defence Contracts: Thales won several contracts with the Australian Defence Force, including a €1.2 billion contract for the upgrade of the Australian Army's Hawkei protected mobility vehicles and a €1.1 billion contract for the upgrade of the Australian Army's M113 armored personnel carriers.
4. Cybersecurity Contracts: Thales' cybersecurity business performed well, with several large contracts, such as a €500 million contract with a major European government for the development and deployment of a national cybersecurity system.

These defence contracts and projects align with Thales' strategic objectives of expanding its presence in key markets, growing its cybersecurity business, and maintaining its position as a leading defence supplier to major customers.

2025 Objectives

Thales' Board of Directors set ambitious objectives for 2025, including a book-to-bill above 1, organic sales growth of between +5% and +6%, and an adjusted EBIT margin between 12.2% and 12.4%. With its strong performance in 2024 and the record order book, Thales is well-positioned to achieve these objectives and continue its growth trajectory.



In conclusion, Thales' Q4 2024 earnings call highlighted the company's record order intake and strong defence performance. With a book-to-bill ratio above 1, robust sales growth, and an impressive adjusted EBIT margin, Thales is poised for continued success in 2025 and beyond. The company's defence segment, in particular, demonstrated exceptional momentum, driven by large contracts and projects that align with its strategic objectives. As an investor, keeping an eye on Thales' progress and potential opportunities is a smart move in the ever-evolving defence and technology landscape.