French group Thales banks on military orders to weather COVID slump

  • 10/22/2020
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PARIS, Oct 22 (Reuters) - French defence electronics group Thales posted a 6.1% quarterly sales decline on weaker demand from coronavirus-hit aeronautics customers but said resilient military orders would keep it on track to meet its full-year 2020 goals. Sales came in at 3.963 billion euros ($4.7 billion) in the third quarter as new orders dropped 10% to 3.088 billion, the Paris-based company said on Thursday, as it published its results on its website. The decline was led by the aerospace division, where sales fell 19% and orders by 26%, Thales said. But the company pointed to robust defence business in the quarter, with more to come from a large German naval contract by year-end. “We anticipate a very strong fourth quarter for defence and security order intake,” Chief Financial Officer Pascal Bouchiat told reporters, citing a pending deal to equip German Navy MKS 180 frigates. Defence and security, the largest division by revenue, recorded a 5.1% increase in sales to 1.881 billion euros for the three months ended Sept. 30. Thales reiterated the lowered full-year goals it unveiled in July in response to the pandemic - including sales of 16.5-17.2 billion euros, earnings before interest and tax (EBIT) between 1.3 billion and 1.4 billion, and a book-to-bill ratio above 1. Other activities hurt by the coronavirus crisis include Thales’ document security business, Bouchiat said. “People are travelling less, so there are fewer passport renewals,” he said.

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