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11 May 11. Thales (NYSE Euronext Paris: HO) released its revenues and order intake figures for Q1 2011. Group Chairman and CEO Luc Vigneron commented: “In the first three months of the year, our revenues benefited from the upturn in the civil aviation business. However, new orders were down this quarter, in the absence of major contracts and in an environment marked by budget pressures in Europe and instability in the Middle East. The rollout of our Probasis performance plan is continuing as planned, so as to strengthen the competitiveness of Thales”.
As usual, attention is drawn to the fact that quarterly fluctuations in revenues and order intake cannot be extrapolated and may differ markedly from the long-term trend, as billing schedules are to a large extent contingent upon the achievement of specific technical milestones on each contract. This is particularly the case when examining quarterly figures in a single business segment or geographical area. New orders booked in Q1 2011 stood at €1,943m, down -19% in organic terms, reflecting both the impact of the confirmed budget pressures in Europe and the absence of any new contract over €100m in unit value this quarter (whereas in Q1 2010 a large IFE order was received from Qatar Airways and a logistics support contract for Watchkeeper UAV was booked in the UK). Nevertheless, the first three months of the year saw an increase in orders of a unit value of less than €10m, which were 6% higher compared with Q1 2010. At 31 March 2011, the book-to-bill ratio stood at 0.77 and the consolidated order book amounted to €24,578m, and continues to represent some 23 months of revenues. Order intake for the Defence & Security business segment amounted to €975m, down -24% compared with Q1 2010. This mainly concerned Defence Mission Systems, which in 2010 benefited from the Watchkeeper logistics support contract in the UK and export naval contracts in the Netherlands. C4I Systems also recorded a decrease in order intake this quarter. Air Operations and Land Defence remained stable compared with Q1 2010, with growth in air traffic management and armaments orders. Aerospace & Transport orders stood at €957m, down -11% compared with Q1 2010. The Space business reported lower orders compared with the high level of the previous year (booking of the Galileo order).
Orders for Transportation Systems also did not reach the same level as during the corresponding period of last year. Conversely, and although Q1 2010 bookings benefited from the significant Qatar Airways IFE order, Avionics saw an increase in orders this quarter, fuelled by the upswing in the civil aviation business (particularly Airbus and support) and in tubes & imaging systems activities. Consolidated revenues amounted to €2,519m at 31 March 2011 compared with €2,479m at 31 March 2010, representing growth of +2% (stable in organic terms). Exchange rate fluctuations impacted revenues by +€31m, primarily as a result of the conversion into euros of the revenues of subsidiaries based outside the eurozone. This was largely due to the strengthening of the Australian dollar (+€12m) and sterling (+€7m). Changes in the scope of consolidation were negligible. Revenues from Defence & Security remained largely stable at €1,381m, compared with €1,390m in Q1 2010 (-2% in organic terms). Revenues from Defence Mission Systems increased, driven by the expansion of the Rafale programme, which compensated for lower billing for the Watchkeeper programme and several export naval programmes. Revenues from Land Defence also rose (armaments contracts for France and the Netherlands). C4I Systems revenues were roughly stable, while revenues from Air Operations fell sharply, mainly due to the reduction in air traffic management billing. In Aerospace & Transport, revenue totalled €1,120m, up 4% compared with the same period of last year. Space revenues dipped slightly, the launch of the Iridium programme and the ramp up of the O3b project still only partia

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