Thales, the French aerospace and defense giant, recently reported record profits. This announcement refers to the beginning of Q1 2025. Overall, the company reported equally staggering total sales of €5 billion. This is a substantial 9.9% increase over the same period in 2024. Increased military budgets among many European countries have propelled the remarkable expansion. Consequently, Thales’ defence sales jumped, driving a strong 15% organic growth.
In the UK, Thales did particularly well, with turnover up 14.9%. Sales have gone through the roof as European nations, one by one, raise their defense spending. This spike is allowing Thales to further pad its outstanding performance numbers within the sector.
Thales’ operations were not uniformly successful across their business lines. The company’s defence orders hit the floor, crashing down 59% in Q1. This contrasts greatly with aerospace orders, which climbed a staggering 45%— a clear sign that the market is booming for all things aviation. In contrast, cyber and digital orders increased just 1%. That’s because, on an annual basis, sales in that region fell by 2.1%.
Thales further reported a 10.5% organic increase in revenues from emerging markets in the first quarter. New orders were down 27%, to €3.8 billion. This decrease comes on the heels of an eye-popping 61% decrease in order intakes within these markets. In mature markets, order intakes actually fell just 1%, underlining the much calmer demand backdrop.
The company is currently monitoring the effects of rising tariffs on its operations and is preparing mitigation plans to adapt to these changes.
“Such analysis takes into account the affected flows on the one hand, and the cases of exemption from tariffs on the other hand (such as in defence activities), along with certain protective contractual conditions in our export contracts (incoterms). Furthermore, Thales is working on mitigation plans in response to these new regulations.” – Thales
Thales reiterated its financial objectives for 2025. By the end of 2025 the company aims for organic sales growth of 5 to 6% and an adjusted EBIT margin of 12.2 to 12.4%.
“In the first quarter of 2025, Thales recorded organic sales growth of nearly 10%, demonstrating the strong momentum of our Defence and Avionics activities, as well as the excellent visibility the Group enjoys,” – Patrice Caine
At the close of a tough year, particularly for its Aerospace sector, Thales is wheeling on hopeful forward-looking prospects.
“Order intake in the first quarter of 2025 was solid and showed growth compared to the same periods in 2022 and 2023. The decline observed compared to the first quarter of 2024 is explained by a particularly high comparison basis.”
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