Thales (HO) Q4 2024 earnings summary

Executive summary

• Achieved record order intake of €25.3 billion in 2024, up 9% year-over-year (+6% organic), with sales reaching €20.6 billion, up 11.7% (+8.3% organic), surpassing EUR 20 billion for the first time and exceeding all financial targets.

• Adjusted EBIT rose 13.4% to €2,419 million (11.8% margin), and adjusted net income increased 7% to €1,900 million; free operating cash flow exceeded €2.1 billion, with a 114% cash conversion ratio.

• Board proposes a 9% dividend increase to €3.70 per share (40% payout), reflecting confidence in continued performance.

• Successful integration and synergy delivery from Imperva and Cobham AeroComms acquisitions.

• Ongoing adaptation of the Space business to new Telco market conditions.

Financial highlights

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

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

• Adjusted EBIT margin improved to 11.8%; adjusted EPS at €9.24 (+9%).

• Net debt at year-end was €3,044 million, down from €4,190 million, supported by robust cash generation and asset disposals.

• Dividend payout ratio maintained at 40%.

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%-100%) expected to be maintained.

• Defence expected to grow 6%-7% organically in 2025; aerospace mid-single-digit, space flat to low single-digit, cyber and digital mid-single-digit.

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

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