Thales to cut 1,300 jobs
March 5, 2024
By Chris Forrester
Aerospace giant Thales has reported that it achieved sales of €18.4 billion in 2023, up 4.9 per cent, and with net income up 14 per cent to €1.77 billion. However, its consolidated net income fell 9 per cent (to €1.02 billion because of an “exceptional expense related to pension obligations in the UK”.
Its Aerospace division has suffered from a downturn in satellite orders with order values falling 5 per cent (to €5.5 billion). Thales says: “This decrease reflects two contrasting trends. On the one hand, strong sales activity in aeronautics activities (avionics and in-flight entertainment (IFE)), linked to a 32 per cent increase in order intake in the civil aftermarket and the IFE Emirates contract mentioned above. On the other hand, while Thales Alenia Space recorded new commercial successes in observation (IRIDE, I‑HAB) and navigation (Galileo), it did not record any new large orders in commercial telecommunications. At December 31, 2023, the segment’s order book stood at €9.3 billion, up 2 per cent from 2022.”
The end result, says Thales, is that it will trim 1,300 jobs due to “structurally weaker demand”. Some 1,000 French employees will be redeployed which will take place over 2024 and 2025, in consultation with employee representative bodies.
Patrice Caine, Chairman and Chief Executive Officer, commented: Once again this year, Thales has achieved remarkable performances. Our excellent sales momentum continued in 2023, with the order intake once again exceeding €23 billion and the order book reaching an all-time high. Organic growth in sales was higher than expected at 7.9 per cent, driven in particular by the dynamism of the civil aeronautics activities. This strong growth resulted in an even stronger EBIT improvement, which grew by nearly 11 per cent, reflecting the quality of the Group’s business model and of its operating leverage. Finally, Thales once again generated high levels of cash, in excess of €2 billion.
”These results reflect the trust our customers place in us, the commitment of our employees and the excellence of our technologies. I would like to thank all our teams for their contribution and dedication. Building on these strengths, the Group worked hard in 2023 to prepare for the future. In this regard, two major acquisitions will enable us to further strengthen our offers in key markets. Cobham Aerospace Communications in avionics, and Imperva in cybersecurity will provide Thales with very high added value technological bricks that are strongly complementary with our current portfolio of solutions. Preparing for the future also means setting ever-more-ambitious CSR goals. The year 2023 marked the end of an extremely positive cycle in which we achieved or exceeded all our multi-year objectives and obtained recognition from leading non-financial rating agencies. We will announce our new ambitions in this area in the second half of 2024.”
Finally, preparing for the future means continuing to increase our R&D investments so we can continue to develop our skills and technologies, which are our greatest asset. We are therefore looking ahead to 2024 with optimism, confident in the quality of our fundamentals, the strength of our positioning and the importance of our contribution to the major societal challenges of our time,” he concluded.