Paris — Defence and technology firm Thales unveiled new four-year targets on Thursday, predicting more than €25bn of revenues by 2028 as global defence spending rises and the company reaps a decade of cyber investments.
Europe’s largest defence technology supplier, which has also quadrupled its cybersecurity revenues through acquisitions in recent years, said it aimed for 5% to 7% average compound sales growth between 2024 and 2028.
Shares in the France-based company rose over 2% in early trading as analysts said the forecasts were broadly as expected.
CEO Patrice Caine told reporters the world was looking at a higher defence spending likely to last 10 years, while cyberattacks and increasing demands for privacy would propel cybersecurity, where Thales aims to be a top-five global player.
“It is evident that the world has entered a cycle of higher investments in defence,” Caine told a news conference.
He said it was too early to judge the impact of US elections on Thales’ broad portfolio from defence to civil aircraft. European nations are widely expected to boost defence spending while some civil markets face potential disruption from hawkish signals on sanctions from president-elect Donald Trump.
“If Europe wants to take a bigger role in (defence), it is more of an advantage than a risk for Thales,” Caine said. “It is unlikely the (security) risks are going to be lower tomorrow.”
Thales targets an operating profit margin of 13% to 14% in 2028, up from 11.6% in 2023 and the 11.7% to 11.8% it expects this year.
The figures were set out ahead of the first full-scale Thales investor day since 2019, a period that has seen margins resume growth after dipping during the Covid-19 pandemic.
Its military and civil products range from sub-hunting sonars to biometric identity systems for banks, and from satellites to seat-back entertainment systems for airlines.
Under Caine, who next month marks 10 years as CEO, Thales has also shifted away from areas like rail signalling to forge a leading role in cybersecurity after buying chipmaker Gemalto in 2019 and US cybersecurity company Imperva in 2023.
Caine set out a strategy to focus on customers prepared to pay a premium for specialist high-value products like banks and critical sectors such as energy, with higher margins than services.
He said Thales wanted to focus on platforms designed to protect data, applications and access for its often sovereign customers.
Caine acknowledged that Thales, born from a French state arms firm privatised in the late 1990s, operated on a different scale from US giants despite strong growth during his tenure.
He said the company’s space business was still in “recovery mode” with pressure coming especially from Elon Musk’s rapidly growing Starlink constellation in low Earth orbit.
Thales predicted average annual sales growth of just 2% for space by 2028, compared to 6% to 7% for defence and cyberunits.
Confirming discussions over consolidation between satellite makers for the first time, Caine said they were at “an exploratory stage”. Industry sources have said Thales and its partner Leonardo are looking at a tie-up of some space activities with Airbus.
He declined to comment on reports that the French state was linking up with Thales, in which it owns 27%, to buy sensitive assets of cyberfirm Atos, after months of speculation about the owner of supercomputers that simulate nuclear bomb tests.
Reuters
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