Thales S.A.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Thales 2025 full-year results conference call. The presentation will be held by Patrice Kane, Thales Chairman and CEO, and Pascal Bouchier, Thales CFO. You will be followed by a question and answer session, at which time, if you wish to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded. I would now like to turn the conference over to Mr. Louis Higonet, VP, Head of Investor Relations. Please go ahead, sir.

Good morning, everyone. Welcome and thank you for joining us for the presentation of Thales 2025 Full Year Results. I'm Louis Higonet. I recently joined Thales as head of IR. I'm excited to be with you today. With me today are Patrice Kane, Chairman and CEO, and Pascal Bouchard, CFO. The presentation will be followed by a Q&A session. As usual, this presentation is audio webcasted live on our website at thalesgroup.com, where the slides and press release are also available for download. A replay will be available soon after the end of the event. Please also note that this presentation contains forward-looking statements based upon what management of the company believes are reasonable assumptions. These statements are not guarantees of future performance. With that, I'd like to turn over the call to Patrice Kim.

Good morning, everyone. So I'm now on slide number two. So let's start by sharing some highlights for 2025, which was another very strong year for Thales. First, on commercial performance, we delivered another year of strong order intake, equalling the record level reached in 2024, thanks to our strategic positioning in high growth markets. Our sales growth accelerated, surpassing our guidance. We achieved a robust improvement in profitability compared to 2024. And most notably, our free printing cash flow reached a record high level, reinforcing our financial strength and ability to fund future growth. Hence, we achieved or exceeded all our 2025 financial targets. On the strategic front, we also made major progress in positioning Thales for the future, thus delivering on our strategic roadmap. Typically, we further increase our production capacity to capture rising defense spending and support our customers' rapid ramp-up. entering we meet demand without compromising quality or on-time delivery which are our clients key priorities we also continued to strengthen our r d leadership with new breakfast in 2025 that keep us at the cutting edge of technology from ai with a cortex to quantum and even nuclear fusion with our Gen F project. And we took a major step in space by signing a MOU with Airbus and Leonardo to create a leading European space player, a move that will reshape the industry and secure Europe's strategic autonomy in this critical domain. So moving to slide number three. To illustrate our ramp-up and successful positioning in the European rearmament dynamic, I'd like to mention our groundbreaking success with SAM TNG, a strategic milestone that reshapes the air defense landscape. The SAM TNG, produced in partnership with MBDA through Eurosam, is the world's most advanced air defense system, which offers long-range air defense, with a unique detection and tracking capability against all current and future threats, aircraft, helicopters, UAVs, cruise and ballistic or hyper-velocity missiles. It definitely sets a new standard in air defense with 360 degree and 80 degree coverage, meaning it can intercept threats anywhere in the sky. Extensive interoperability with NATO systems, ensuring seamless integration with allied forces, high firepower with low manpower requirements, optimizing operational efficiency and camping and decamping, and 24-7 operations. So with some TNG, we have disrupted a long-standing de facto monopoly. Denmark's decision to select some TNG over their legacy system is unexpected. a clear validation of our technology, performance, and value proposal, proving that European sovereignty in air defense is now a tangible reality. And this is only the beginning with SAMT-TNG being a high-value, large-scale system. We expect many more export successes. Moving to slide four. Now to discuss what truly differentiates Thales, our innovation and technological leadership, I would like to focus on AI where we are leading the transformation. Our AI leadership is built on scale and expertise with 800 AI experts and 100 PhD students. We are also expanding Cortex globally with five country hubs across the globe 200 patents covering the full spectrum of AI technologies, securing our intellectual property and competitive edge. Our Cortex accelerator is now fully deployed across all TELES divisions, embedding AI into 100-plus products with 250-plus use cases deployed or in development. Another of our strengths lies in our strategic partnership. We are joining forces with industry leaders to co-develop solutions or use cases. With Dassault Aviation, for instance, we are integrating Cortex into next-gen aviation systems and enhancing functions for manned or unmanned aircraft for observation, situation analysis, decision-making, planning, and control during military operations. With Naval Group, we aim to accelerate the development of trusted AI solutions applied to critical systems in several key areas, collaborative combat, decision support systems, electronic warfare, training and simulation, logistics and support, just to mention a few. Then to give you concrete examples of how we are turning AI and innovation into customer value, Number one, our Talios reconnaissance and targeting pods capabilities are now unmatched, boosted by Cortex AI. It provides AI-assisted targeting, passive detection, and enhanced vision to overcome stealth threats, electronic warfare, and poor visibility. It maximizes mission efficiency, entering safety, and maintaining superiority across all domains for the end users. The second example is in the maritime domain, our autonomous mine countermeasures with first delivered in 2025 to the French Navy as AI augmented detection, classification and identification capabilities. I am now on slide five. Moving on to our strategic ambitions in space. an area where TELES is positioning itself at the heart of Europe's sovereign capabilities. We have taken a major step forward by signing a memorandum of understanding with Airbus and Leonardo to create a leading European space player. This partnership will combine our complementary strengths to build a global scale champion for Europe. Our target is to launch operations in 2027, subject of course to regulatory approvals and closing conditions. And this initiative holds significant value creation potential for all stakeholders, for customers, for Europe, for investors. For customers, it means end-to-end space solution from secure connectivity to Earth observation and exploration. For Europe, it ensures strategic autonomy in a critical domain. And for investors, it opens new avenues for growth in one of the fastest evolving high-tech sectors. Let's now move to slide six to look at our financial performance with a few charts. As previously said, we have enjoyed strong commercial momentum in 2025, reaching 25.3 billion euros for the second year in a row. The book-to-bill ratio is maintained significantly above 1, with reaching 1.14. Sales recorded a sharp 8.8% organic growth, reaching a record high 22.1 billion euros. Adjusted EBIT rose by more than 13% on a reported basis, while EBIT margin improved to 12.4%. Adjusted net income, group share, grew by 5.5%, crossing the 2 billion euro mark, and a very strong generation of free operating cash flow from continued activities, which increased by 27%, reaching 2.6 billion euros, notably supported by the solid momentum in our order intake. And the last chart, the dividend. This new year of strong financial performance is leading our board of directors to propose at the next AGM in May a 5.5% increase to 3.90 euros per share. It demonstrates Thales' confidence and commitment to regular shareholder returns. Turning now to slide seven, looking at our extra financial performance in 2025. I indeed wanted to come back on the continuous progress we've made in terms of corporate social responsibility. First pillar, society. The Thales Climate Passport training deployed in 2024 raises employees' awareness to climate change and its impact on society. The 2025 campaign was a success with over 94.6% of managers who completed the training way above the 85% target. We are clearly ahead of time on this pillar. Second pillar regarding our strategy for climate change. Our CO2 emissions from scope one and two decreased by 75%. in 2024 and scope three emissions decreased by 15.4% compared to 2018. The group has thus achieved its 2030 targets ahead of schedule for the third consecutive year. The absolute carbon footprint reduction targets remain relevant for 2023 in light of the group's growth prospects. Finally, our third pillar, named People, aims at strengthening gender diversity, where at the end of 2025, we are in line with our 2030 trajectory. First, the percentage of women in senior management position reached 21.8% and this performance is in line with the group's trajectory to reach the set goal of 25% by 2030. Second, the percentage of management committees with at least four women reached 69.2% in 2025 compared to 64.1 at the end of 2024. For 2030, we have set an ambitious target to have 85% of management committees with at least four women. After this introduction, I now hand over to Pascal, who will comment our financial results in greater detail.