March 6, 2018 / 6:05 AM / a year ago

France's Thales says expects to exceed medium-term targets

PARIS, March 6 (Reuters) - France’s Thales said on Tuesday it expects to exceed medium-term targets that it set itself four years ago, as higher defence spending offsets slower telecom satellite markets.

Europe’s largest defence electronics group said 2017 sales rose by 6.1 percent, or 7.2 percent on an underlying basis, to 15.795 billion euros ($19.50 billion).

Earnings before interest and tax (EBIT), or operating profit, rose 14 percent to 1.543 billion euros for a margin of 9.8 percent, up 0.7 percentage points. Thales also increased its dividend by 9 percent to 1.75 euros.

Analysts were on average expecting annual operating profit of 1.47 billion euros on revenue of 15.595 billion euros, according to Thomson Reuters I/B/E/S estimates.

Thales said its order intake fell 9 percent to 14.92 billion euros in 2017, but was broadly unchanged after stripping out an Indian order for fighter jets in 2016.

For 2018, Thales expects an order intake of around 15.5 billion euros and growth in underlying sales of 4-5 percent.

Operating profit is forecast to come in at 1.62-1.66 billion euros. The forecasts exclude the impact of its planned acquisition of digital security firm Gemalto, which Thales said was on track to close in the second half of 2018.

Thales added it now believed it can exceed a target for average organic sales growth of more than 5 percent in 2016-2018, and said its 2018 operating margin should exceed a forecast of 9.5-10 percent for 2017/18 that it previously set.

$1 = 0.8100 euros Reporting by Cyril Altmeyer and Tim Hepher; Editing by Sudip Kar-Gupta

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