Thales S.A.

H1 2026 order intake was EUR 12.5 billion, up 22% organically year over year, and sales were EUR 10.9 billion, up 7.8% organically. Adjusted EBIT was nearly EUR 1.4 billion, up 10% on a reported basis and 11% organically, with EBIT margin at 12.5%; adjusted net income group share rose 13% to EUR 990 million. Free operating cash flow was EUR 1.8 billion to EUR 1.9 billion, versus EUR 0.5 billion last year, and net debt fell to about EUR 500 million / EUR 519 million at midyear from EUR 1.6 billion at December 31, 2025. For 2026, Thales reaffirmed organic sales growth of 6% to 7% or EUR 23.3 billion to EUR 23.6 billion and adjusted EBIT margin of 12.6% to 12.8%, while raising expected book-to-bill to above 1.1 and free cash flow conversion to 100% to 110%.

Patrice Caine said the first half showed Thales is benefiting from prior investments in industrial capacity and engineering, especially in defence, while cyber rebounded and aerospace stayed resilient. He emphasized strategic milestones including new counter-drone and smart ammunition solutions, partnerships with Destinus, Airbus Defence & Space, MBDA Deutschland, Safran Electronics Defense, Renault, and Google, plus the planned Exail acquisition. His tone was confident and constructive, repeatedly stressing strong visibility in defence and a favorable long-term backdrop in space and cyber.

Jeremie Papin highlighted solid breadth in orders, with 18 large orders above EUR 100 million, 13 of them in defence, and 5 in space. He said adjusted EBIT rose to nearly EUR 1.4 billion because gross margin increased by EUR 219 million, partly reinvested through R&D, which was up 9% to 6.2% of sales; G&A grew only 3%, and restructuring costs fell to EUR 24 million. He also pointed to net financial charges of minus EUR 33 million, a 25.8% tax rate including a EUR 57 million additional French corporate tax charge, and very strong cash generation driven by working capital and customer payment phasing; dividends paid were EUR 606 million and new leases were EUR 178 million.

Analysts pressed on whether defence growth above the medium-term target is sustainable, and management said the higher pace reflects prior industrial investment and could support low-double-digit potential, but the business is not linear and they do not want to change the full-year view yet. They were also asked about IRIS2, and management said discussions are progressing as expected, with an expectation of follow-on contracts soon and a positive sign in Germany’s willingness for interoperability with its own constellation. In digital, questions focused on the margin drop and payments weakness; management said part of the decline was due to one-offs and forex, but not all of it, and they expect a second-half rebound while noting payments are hurt by volume and price pressure and customer stocking/destocking.