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12 May 06. Thales revenues at end March 2006: Euros 2.05bn, 2.6% organic growth. Thales Group consolidated revenues in the first three months of 2006 totalled Euros 2,054m, an increase of 1.8% compared to revenues for the same period in 2005 (Euros 2,016m). On a like-for-like basis, revenues increased by 2.6%. Exchange rate fluctuations had a positive translation effect, increasing revenues by Euros 29m in non-Euro consolidated entities. Variations in the scope of consolidation (mainly due to the deconsolidation of High Tech Optics and Thales Broadcast & Multimedia, which were divested, respectively, at the end of November and at the end of December 2005) resulted in a net reduction of Euros 43m. Consolidated revenues by division:
Aerospace division revenues grew by 15% for the first three months, with some variations between businesses : the continuing overall growth in civil activities, particularly in flight entertainment and through-life support of the Airbus fleet, higher billings in military avionics (A400M & Rafale programmes) as well as the first billings on the Watchkeeper programme largely offset the reduction in export sales from military aircraft programmes.
In the Air Systems division (+ 22%), revenues grew in all defence activities, most notably in missile electronics with the MICA & Seawolf missiles; in radar activities with European naval programmes and the Cobra counter-battery (weapon locating) radar programme; and in the air defence business with most revenues coming from the joint venture with Raytheon. Billings from the air traffic management activity remained at a high level, as in the first three months of 2005.
The Land & Joint division (+ 20%) again posted a strong growth in all its command & communications systems and equipment segments. Most notable achievements concerned the execution of networking programmes such as Valorita and Socrate and of the Syracuse III satellite communications programme. Sales of MBITR tactical radios in the United States continued to increase at a rapid pace. Growth in revenues is again fuelled by export contracts to Asia.
The decrease in revenues in the Naval division (- 41%) results, as anticipated, from the end of the billings recorded on several major programmes in the Middle East and Europe. This evolution is further accentuated by the fact that the division had recorded notably high revenues on the Sawari 2 frigate programme for Saudi Arabia in the same period of last year. The expected decrease over the full year will be of lower magnitude thanks to the kick off of new contracts booked in the last months of 2005 (European Multimission frigates for France & Italy and Scorpene submarines for India). Sales in the first quarter of 2006 include billings recorded on the Scorpene sub-marine programme in Malaysia and the Type S frigates for Greece and on the first batch the light corvettes for Indonesia.
In the Security division (+ 13%), where business cycles are shorter, growth in sales remained sustained in cryptography, secure electronic transactions, secure identification solutions, electron tubes, as well as in the GPS navigation products. The Transport & Energy business line recorded a slight decrease in sales, due to billing schedules on several contracts of integrated fare collection systems, mainly in Northern Europe.
Revenues from the Services division remained stable over the first three months with an increase in Training & Simulation and Information Systems activities and a rather significant decrease in sales to two major clients in the telecom services business in the United Kingdom.
Geographical breakdown of revenues:
The proportion of revenues billed in Europe increased slightly to 62% due to higher billings in France (avionics for the Rafale, civil aerospace, defence communications and air systems) and a rise in sales to the United Kingdom, where the vitality of defence businesses (Watchkeeper programme and missile electronics) more than offsets

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