Thales confirms strong revenue growth in 2007

The Thales Group completed a large-scale reconfiguration of its business portfolio in 2007 with the finalisation of the major strategic operations initiated the previous year. These included the acquisition of Alcatel-Lucent’s transportation and security businesses and space businesses (consolidated as from 1 January and 1 April 2007 respectively) and the sale to DCNS of Thales’s surface naval businesses in France (deconsolidated as from end-March 2007). With respect to this second operation, Thales’s 25% interest in DCNS is accounted for under the equity method and is therefore not included in Thales revenue figures. The Thales Group’s scope of consolidation was also affected by the divestment of its interests in the propulsion businesses of Protac and Bayern Chemie (deconsolidated as from 1 July 2007), the divestment of its interest in FACEO (deconsolidated as from 1 October 2007) and the full-year impact of the sale of its GPS positioning and navigation equipment activities in mid-2006. Total changes in the scope of consolidation in 2006 and 2007 correspond to a net increase in revenues of €1,583m in the financial statements for 2007. Exchange rate fluctuations, mainly due to the weakening US dollar, had a negative impact, reducing revenues by €162m in 2007. Taking these various factors into account, the Group’s historical core businesses contributed €611m to overall revenue growth in 2007. This equates to organic growth of 6.4%, a significantly higher rate of growth than had been recorded in recent years. In addition, the businesses acquired from Alcatel-Lucent achieved overall growth of almost 10% in 2007 New orders totalled €12,856m in 2007, representing a book-to-bill ratio of 1.05, an overall increase of 19%, and an increase of 1% within the Group’s historical scope of consolidation. This growth was mainly driven by strong momentum in the intake of small and medium-sized orders. Only six contracts with unit values greater than €100m were booked in 2007. Together, these six contracts are worth €1,092m. This compares with eight contracts in this category booked in 2006 for a total value of €1,270m. The biggest contract booked in 2007 is worth €430m and involves the manufacture of a dual satellite telecommunication system for Yahsat of the United Arab Emirates. This contract, worth a total of €1.2bn, is being conducted by a joint team of Thales Alenia Space and Astrium, in partnership with Thales Land & Joint Systems for part of the ground station infrastructure. Other major orders booked in 2007 include the supply of electronic integrated masts to equip ocean patrol vessels for the Royal Netherlands Navy, installation of an electronic protection system for air defence batteries in Saudi Arabia, the first Sycobs sonar systems for France’s Barracuda-class nuclear-powered submarines and the prime contract for protected tactical reconnaissance vehicles for Luxembourg. At 31 December 2007, the order book stood at €22.7bn and represented nearly 22 months of revenues.