Thales : Présentation investisseurs - juin 2024 (en anglais uniquement)

Investor meeting

J u n e 2 0 2 4

www.thalesgroup.com

Table of contents

01	02	03
Introduction to Thales		Key priorities	Outlook

05	06
Sustainability: safer,		2023 Full-Year results
greener, more inclusive

04

Acquisitions

2

Thales today: a set of focused, technology-driven businesses

Sales by segment

EBIT margin

R&D total spend

29%

11.0%

11.6%

Aerospace

9.0%

10.2%

Civil

8.1%

53%

~70%

~€4bn(a)

~30%

aeronautics:

€18.4bn(a)

~10%

Defence &

Customer-

Self-funded

18%

security

funded R&D

~20% of sales

R&D

Digital identity &

security

2014-18

2020 2021 2022

2023

average

Flight	Civil	Defense sensors	Air Traffic	Data
avionics	satellites	& mission systems	Management	protection

#3	#2	#1	#1	#1
worldwide	worldwide	in Europe	worldwide	worldwide

(a) 2023. Excluding transport, treated as discontinued operations (IFRS5)

Smart cards

(EMV, SIM, eSIM)

#1

worldwide

3

Portfolio focused on 3 leading and highly synergistic businesses

Critical decision chains

Sensing and data gathering

Data transmission and storage

Data processing and decision making

Aerospace

Defence & Security

Digital identity & Security

Observation satellites	Military communications	Flight management
systems

Advanced sensors

Digital security

Airspace surveillance

4

Thales builds on 4 key strengths

Cutting edge R&D

~€4bn, ~20% of sales ~70% customer-funded ~33,000 engineers

Top 100 global innovator for the 11th year

Portfolio of more than 20,500 patents

Connectivity							Big data
Mobility							analytics
Artificial							Cyber-
AI
intelligence						security

Deep domain knowledge	Large digital asset base
Top 3 globally or	Thales portfolio:
#1 in Europe across	digital "by nature"
businesses	Significant organic and
Leverage across	inorganic initiatives,
end markets with many	targeting
technological similarities	4 key digital technologies
	Large integrated network
	of digital native talents

Global presence

Presence in 60+ countries and sales in 100+ countries

Proven ability to address complex markets and partnerships

Capitalizing on 40+ year presence

5

Table of contents

01	02	03
Introduction to Thales		Key priorities	Outlook

05	06
Sustainability: safer,		2023 Full-Year results
greener, more inclusive

04

Acquisitions

6

Key 2024 priorities

1. Continued ramp up to capture market growth
2. Sustained excellence in R&D, a key differentiator
3. Recognition of our sustainability performance
4. Demonstrated optimized capital allocation strategy

7

1 Confirmed ramp up of recruitment capabilities

Pursuing dynamic recruitment in 2023

• Ramping-upengineering centers in Romania and India
• Continued increase in production outputs
• Turnover back to pre-Covid levels

Reinforcing learning & development capabilities

• Strengthened onboarding processes to support new engineers' integration and job readiness
• Acceleration of upskilling through internal academies

8,500 recruitments expected in 2024

• Emphasizing high expertise roles
• Continued investments to boost brand awareness
• Internal mobility linked to space telco repositioning

Global recruitment volumes

Number of employees	11,500	10,900
9,400	8,700
Prior to	8,500
Gemalto
acquisition	6,000
5,800

2015-18		2019(b) 2020 2021 2022(a) 2023(a) 2024
average

1. 2022 and 2023 data excluding Transport
2. 2019 data with Gemalto over 12 months

Close to 11,000 recruitments in 2023, of which:

• 40%+ in engineering and 21% in industry
• 30% of women

8

1 Ramp-up in capex and supply chain management to address strong demand

Continued increase in capex

• Ramping-upproduction output to meet growth
• Several sites extension and footprint optimization

Supply chain disruption mitigated

• Improvement in electronic components
• Continued action plan mitigation to fix recurring tensions on hardware (PCB and mechanical parts)
• • Anticipation: alternative sourcing geographies, safety stocks
  • Diversification: double sourcing, longer term visibility to our suppliers
  • Optimization: internal lead times

Capex ramp-up plan

€m							~720
		622	IS/IT and other
	496	525
380	446
	371					Engineering

and production

Facilities

	2018	2019	2020	2021	2022	2023	2024
Capex	-2	6	-112	-48	55	171	~260
minus D&A

NB: 2020-2024: continued operations (excluding Transport)

9

2 Sustained excellence in R&D, a key differentiator

Sustaining excellence in R&D

• Among Clarivate's "top 100 global innovators" 2024, for the 11th year
• Portfolio of more than 20,500 patents

Leveraging multiple funding sources

• €73m collaborative R&D grants through European Defence Fund
• Continued growth of customer funded R&D

Accelerating R&D investment areas

• Quantum sensing
• Edge computing
• Open source hardware
• Future paradigms of communications: 5G and 6G
• Artificial intelligence

Self-funded R&D

€m and % of sales

1,108

797

~6.5%

6.0%

5.0%

2017	2023	Medium-
		term target

NB: 2020-2023 and medium-term: continued operations (excluding Transport)

10