Thales (TCFP.PA): 1H26 First Take: +4% EBIT beat; strong cash; Defence strong, Cyber & Digital lags

Research evidence excerpt

Thales (TCFP.PA): 1H26 First Take: +4% EBIT beat; strong cash; Defence strong, Cyber & Digital lags

Equity Research

23 July 2026 | 6:57AM BST

Thales (TCFP.PA): 1H26 First Take: +4% EBIT beat; strong cash; Defence

strong, Cyber & Digital lags

Sam Burgess

+44(20)7774-9651 |

sam.burgess@gs.com

Goldman Sachs International

Jubril Moronfolu

+44(20)7051-0985 |

jubril.x.moronfolu@gs.com

Bottom line: Thales 1H26 results were mixed but positive overall, with sales broadly

Milind Sikchiin line with company consensus, while Adjusted EBIT was +4% vs cons, adjusted net +1(332)245-7985 |

income +9% vs cons and order intake +19% vs cons. Free operating cash flow was the milind.sikchi@gs.comGoldman Sachs India SPL

major positive at €1.87bn, almost 4x consensus, with much of the outperformance

due to favourable customer-payment phasing and a c.€1.1bn year-on-year

improvement in working capital. Defence was the clear operational highlight, with

sales ahead of cons and +13% organically YoY and a 13.8% margin, while Aerospace

profitability was also materially ahead. The offset was Cyber & Digital: sales were

-2% vs cons, but EBIT missed consensus by 17% as Digital margins declined, partly

reflecting non-recurring benefits in the prior-year comps, alongside margin pressure

in Payment Services and Identity & Biometrics. Cyber itself appears to be recovering,

returning to +4.5% organic growth in Q2, with its margin broadly stable in 1H. FY26

guidance was reiterated, including the upgraded book-to-bill and cash-conversion

targets announced on 3 July, but softer performance elsewhere in Cyber & Digital

may do little to ease investors’ broader concerns around the division.

Group Performance: Order intake was €12.47bn, +19% vs. company consensus,

implying book-to-bill of 1.14x.