Thales’ 2021 sales targets maintained as Q3 sales slide slightly

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Thales, the French defense group, reaffirmed full-year financial forecasts, during which time it reported a 1.4% dip in underlying Q3 sales, brought down by comparisons with the easing of a first wave of COVID-19 lockdowns a year ago.

The company makes airport control towers and radars for fighters, in addition to biometric identity systems, and reported a 9% pick-up in quarterly orders on a like-for-like basis, spearheaded by its satellite business and some recovery in the commercial flying sector.

The rebound in short-haul and domestic air travel, though gradual, helped push Thales’ Aerospace division sales up 4% in the third quarter.

Recovery

Meanwhile, its Digital Identity and Security division also went up as more people begin traveling after avoiding flights during a long pandemic.

The Chief Financial Officer Pascal Bouchiat told reporters that long-haul will take longer to recover.

Overall, the Thales group sales slipped 1.4% to 3.555 billion euros ($4.1 billion) in Q3 because of a tough comparison basis with the same period in 2020.

New orders went up by an underlying 9% to 2.992 billion. Thales announced it would continue to implement the sale of its GTS railways signaling business after announcing advanced talks in August to sell the business to Hitachi.

Going ahead

The proposed Hitachi sale values the division in question at 1.66 billion euros. On Tuesday, the company said it expects to sign a definitive deal in Q1 of 2022. For now, the group’s numbers of last year and 2021 have been adjusted to cut out the outgoing unit.

Thales expects that 2021 sales will reach between 15.8 billion and 16.3 billion euros based on its structure as of August 2021.

The expected operating margin stands at 9.8% to 10.3%. The company also said it does not expect a significant impact from the cancellation of a contract by Australia to supply it with French submarines.