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29 Jul 08. Thales announced First Half 08 results. Highlights included
-Organic growth in revenues growth of +6.3% (on a like-for-like basis andwith constant exchange rates);
-Sharp organic increase in order intake (+16%), with the award of several major contracts;
-Organic growth of EBIT by 10%, thanks to the very good performance of the Defence segment and despite the impact of difficulties on some complex ticketing contracts in the Security segment;
-Full impact of the “Optimum” plan launched in 2005 and continuation of competitiveness efforts, particularly to withstand a very unfavourable currency environment;
-Confirmed full-year objectives of a 6% organic growth in revenues and an EBIT margin of at
least 7.25% of revenues.
-Net income, Group share*, of €289m, includes capital gains of €57m. Net income as at 30 June 2007 included a €318m exceptional capital gain related to the DCNS transaction.

Changes in the scope of consolidation

The 2008 financial year is the first to reflect the full impact of the major strategic operations conducted with Alcatel-Lucent in 2007: only the Transport and Security businesses acquired from the telecommunications group were consolidated from 1 January 2007, with the space businesses joining the scope of consolidation from 1 April 2007.

Other changes in the scope of consolidation of the Thales Group include the sale to DCNS of Thales’s surface naval businesses (deconsolidated as from 31 March 2007), the sale of Thales’s interests in Protac and Bayern Chemie (propulsion business), deconsolidated as from 1 July 2007, and in FACEO, deconsolidated as from 1 October 2007, and the sale of the payment solutions business to the American group Hypercom at the beginning of 2008.


Consolidated revenues stood at €5,668m, compared with €5,584m at 30 June 2007 or €5,791m on a restated basis, representing an overall reduction of -2% from the restated figure and a +6.3% increase on a like-for-like basis and with constant exchange rates.

Changes in the scope of consolidation: the restated figure for 2007 first-half revenues includes €207m in revenues generated in the first quarter of 2007 by the space businesses acquired from Alcatel-Lucent.
In the published 2007 figures, these businesses were not consolidated until the second quarter, i.e., from 1 April. Other changes in the scope of consolidation, primarily the sale of businesses and interests as indicated above, led to a net deconsolidation of €197m in revenues.

Exchange rate fluctuations impacted revenues by –€261m, primarily as a result of the conversion into euros of the revenues of subsidiaries based outside the euro zone. The main fluctuations involved the fall of the US dollar and of the pound sterling against the euro.

In Aerospace & Space, where revenues increased by 12% overall on a like-for-like basis and with constant exchange rates, the space business recorded particularly sharp growth in revenues (+25%) across all market segments: telecommunication satellites (Yahsat, Globalstar), observation satellites (Sentinel) and navigation systems (Galileo). Sales by the Aerospace division rose by 5% at constant exchange rates, with a 6% increase in revenues from military customers largely driven by strong growth in billings for defence electronics on France’s Rafale programme and the Mirage F1 upgrade programme for Morocco. In non-defence markets, revenues rose by 4%, particularly as a result of brisk activity in the regional aircraft segment with Bombardier and Sukhoi, and good deliveries to Airbus, in line with expectations. By contrast, sales of in-flight entertainment (IFE) systems decreased, reflecting the first effects of delays on the B787 programme and, to a lesser extent, on the A380 programme.

In Defence, revenues were 5% higher than in the first half of 2007 on a comparable basis. Land & Joint Systems sales rose by close to 9%, main

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