French defence and aerospace group Thales raised its full-year outlook on Thursday after reporting a 21% jump in first-half order intake, comfortably beating analyst forecasts and reinforcing confidence in Europe’s defence spending boom.
Order intake rose to €12.47 billion in the six months to June, up from €10.34 billion a year earlier, including 18 individual contracts worth more than €100 million each. According to a company-compiled analyst consensus, the market had expected growth of just 1%.
Cash generation was the standout. Free cash flow reached €1.87 billion, nearly four times analyst expectations, while adjusted EBIT rose 11.4% to €1.37 billion. Defence, which now accounts for more than half of group sales, recorded a 28% increase in order intake to €7.35 billion.
The results build on a trading update earlier this month, when Thales raised its full-year guidance despite taking an approximately €450 million hit—largely a non-cash accounting impact—following Germany’s cancellation of a frigate programme. On Thursday, the company lifted its guidance again, saying it now expects stronger order intake and higher cash generation than previously forecast.
“The European defence rearming is real and coming,” Citi analysts said in a note. Thales shares rose as much as 3.4% following the results.
The company also confirmed that its planned satellite venture with Airbus and Leonardo remains on track for completion in 2027, although the transaction continues to face opposition from German satellite manufacturer OHB.
Thales also reaffirmed plans to acquire French underwater robotics specialist Exail in a deal valued at approximately €3.9 billion, strengthening its position in autonomous maritime systems and underwater defence technologies.
For investors, the results reinforce a broader trend across Europe’s listed defence sector, where expanding order books, improving cash generation and targeted acquisitions are increasingly underpinning valuations as governments accelerate military procurement and rearmament.
