French aerospace and defence giant Thales reported total first quarter 2025 sales of €5 billion, which was an increase of 9.9% from the corresponding period in 2024.
This was mainly because of the company seeing rising defence sales, which jumped 15%, as several European nations boost their defence spending.
Aerospace sales advanced 8.4%. However, cyber and digital sales fell 2.1%.
In mature markets, Thales saw strong sales growth in the first quarter, hitting 9.7% in organic terms. This was mainly driven by UK sales, which advanced 14.9%. In emerging markets, sales rose 10.5% in organic terms in the first quarter.
However, new orders also dropped by 27% to €3.8bn. While aerospace orders soared 45%, defence orders plummeted 59%, with cyber and digital orders only edging up 1%.
Order intakes plunged 61% in emerging markets, while only falling 1% in mature markets.
Thales also revealed that order numbers were down in the first quarter of the year due to a very high comparison base, especially in defence. This is because in the first quarter of 2024, the company had received two major contracts with a unit value of more than €500 million each, among other contracts.
According to consensus compiled by Thales, market analysts had been expecting quarterly sales to hit €4.8bn, with order intake coming up to €4.9bn.
“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, chairman and CEO of Thales, said in the first quarter order intake and sales report on the company’s website.
He added: “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.”
Thales launches preliminary work to assess tariff impact
The French defence company shared that it had started looking into the impact of rising tariffs, as they stand on Thursday, reiterating the vast majority of its operations continue to have robust visibility and a strong medium to long-term outlook.
Regarding its tariff analysis, the company said: “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.”
These mitigation plans include the redirection of some production flows, supply chain adjustments, customer surcharging and the use of specific customs programmes such as duty drawbacks, among others.
The company also reconfirmed its financial guidance for 2025, expecting organic sales growth of anywhere between 5% and 6%, and adjusted earnings before interest and taxes (EBIT) margin of between 12.2% and 12.4%.