REGULATED PRESS RELEASE

published on 03/04/2025 at 07:00 from THALES (EPA:HO)

Thales makes available its 2024 Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

AT 31 DECEMBER 2024

1 Thales – 2023 Universal Registration Document

Financial statements

Consolidated financial statements

7.1. Consolidated financial statements

7.1.1. Consolidated profit and loss account

(in € millions)	Notes	2024	2023
Sales	Note 2	20,576.6	18,428.4
Cost of sales		(15,202.7)	(13,662.0)
Research and development expenses		(1,273.7)	(1,107.7)
Marketing and selling expenses		(1,590.3)	(1,384.0)
General and administrative expenses		(692.9)	(621.0)
Restructuring costs	Note 10.3	(118.3)	(91.4)
Income from operations	Note 2	1,698.7	1,562.3
Disposal of assets, changes in scope of consolidation and other	Note 3.2	(278.9)	(387.9)
Impairment of assets	Note 3.2	(157.6)	—
Income of operating activities before share in net income of equity affiliates		1,262.2	1,174.4
Share in net income of equity affiliates	Note 5.1	95.1	147.4
Income of operating activities after share in net income of equity affiliates		1,357.3	1,321.8
Financial interests on gross debt		(289.3)	(159.6)
Financial interests on cash and cash equivalents		123.5	161.4
Interest expense, net	Note 6.1	(165.8)	1.8
Other financial expenses	Note 6.1	39.4	(65.0)
Finance costs on pensions and other employee benefits	Note 9.3	(51.3)	(77.8)
Income tax	Note 7.1	(247.3)	(252.2)
Net income relating to continued operations		932.3	928.6
Net income relating to discontinued operations	Note 1.3	412.1	74.3
NET INCOME		1,344.4	1,002.9
Shareholders of the parent company		1,419.5	1,023.4
Of which: net income relating to continued operations, Group share		1,007.4	949.1
Of which: net income relating to discontinued operations, Group share		412.1	74.3
Non-controlling interests		(75.1)	(20.5)
Basic earnings per share (in euros)	Note 8.2	6.91	4.91
Diluted earnings per share (in euros)	Note 8.2	6.89	4.89

Segment information (including Adjusted EBIT calculation) is detailed in Note 2.1.

7.1.2. Consolidated statement of comprehensive income

(in € millions)			2024
(in € millions)		Group share	Non- controlling interests	Total
NET INCOME		1,419.5	(75.1)	1,344.4
Translation adjustments	Note 8.1	240.4	0.9	241.3
Cash flow hedge	Note 8.1	(80.6)	(3.6)	(84.2)
Equity affiliates	Note 5.1	1.8	—	1.8
Discontinued operations		17.8	—	17.8
Items that may be reclassified to income		179.4	(2.7)	176.7
Actuarial gains (losses) on pensions	Note 9.3	64.2	1.6	65.8
Financial assets at fair value		(18.0)	(2.1)	(20.1)
Deferred tax	Note 7.2	(32.0)	(2.9)	(34.9)
Equity affiliates	Note 5.1	6.6	—	6.6
Discontinued operations		2.6	—	2.6
Items that will not be reclassified to income		23.4	(3.4)	20.0
Other comprehensive income (loss) for the period		202.8	(6.1)	196.7
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD		1,622.3	(81.2)	1,541.1

Group share Non- Total

controlling interests

7.1.3. Consolidated statement of changes in equity

(in € millions)	Number of shares outstanding (thousands)	Share Additional Retained capital paid-in earnings capital			Cash flow Cumulative Treasury Group hedge translation shares share adjustment				Non- controlling interests	Total equity
AT 1^st JANUARY 2023	210,134	640.2 4,076.6 3,222.3				(124.6)	(258.3) (382.3) 7,173.9		207.6	7,381.5
Net income	—	—	— 1,023.4			—	—	— 1,023.4	(20.5)	1,002.9
Other comprehensive income (loss)	—	—	— (255.8)			92.2	(110.7)	— (274.3)	2.4	(271.9)
Total comprehensive income for 2023	—	—	— 767.6			92.2	(110.7)	— 749.1	(18.1)	731.0
Parent company dividend distribution	—	—	— (633.7)			—	—	— (633.7)	—	(633.7)
Third-party share in dividend paid by subsidiaries	—	—	—	—		—	—	— —	(49.3)	(49.3)
Share-based payments	—	—	—	24.4		—	—	— 24.4	—	24.4
(Acquisitions)/disposals of treasury shares	(3,466)	—	—	(16.4)		—	— (47	4.6) (491.0)	—	(491.0)
Capital reduction through cancellation of shares ^(a)	—	(9.6)	(371.0)	—		—	— 380.6 —		—	—
Other	—	—	—	8.1		—	(0.8) — 7.3		(1.2)	6.1

AT 31 DECEMBER 2023 206,668 630.6 3,705.6 3,372.3 (32.4) (369.8) (476.3) 6,830.0 139.0 6,969.0

Net income	—	—	— 1,419.5		—	—	— 1,419.5	(75.1) 1,344.4
Other comprehensive income (loss)	—	—	— 23.4		(81.1)	260.5	— 202.8	(6.1) 196.7
Total comprehensive income for 2024	—	—	— 1,442.9		(81.1)	260.5	— 1,622.3	(81.2) 1,541.1
Parent company dividend distribution	—	—	— (708.4)		—	—	— (708.4)	— (708.4)
Third-party share in dividend paid by subsidiaries	—	—	—	—	—	—	— —	(14.5) (14.5)
Share-based payments	—	—	—	60.0	—	—	— 60.0	— 60.0
(Acquisitions)/disposals of treasury shares	(1,355)		—	(73.4)	—	— (20	2.0) (275.4)	— (275.4)
Capital reduction through cancellation of shares ^(a)	— (1	2.8)	(573.0)	—	—	— 585.8 —		— —
Other	—	—	—	(14.1)	—	0.8 — (13.3)		(0.4) (13.7)
AT 31 DECEMBER 2024	205,313 61	7.8 3,132.6 4,079.3			(113.5)	(108.5) (92.5) 7,515.2		42.9 7,558.1

(a) On March 08, 2023, the Board of Directors decided to reduce Thales' share capital by cancelling 3,201,169 of its own registered shares, i.e. 1.5% of the share capital, with effect from March 13, 2023. On October 8, 2024, the Board of Directors decided to reduce Thales' share capital by cancelling 4,268,227 of its own registered shares, i.e. 2.03% of its share capital, with immediate effect.

Retained earnings include actuarial gains and losses on pension obligations amounting to -€491.6 million at end 2023 and -€335.1 million at end 2024.

Financial statements

Consolidated financial statements

7.1.4. Consolidated balance sheet

Assets

(in € millions)	Notes	31/12/24	31/12/23
Goodwill	Note 4.1	8,899.2	8,939.6
Other intangible assets, net	Note 4.2	2,532.7	1,288.1
Property, plant and equipment, net	Note 4.2	3,715.5	3,596.1
Investments in equity affiliates	Note 5	1,648.2	1,648.4
Non-consolidated investments	Note 6.4	160.6	129.2
Other non-current financial assets	Note 6.4	371.6	343.9
Deferred tax assets	Note 7.3	1,366.6	1,183.3
NON-CURRENT ASSETS		18,694.4	17,128.6
Inventories and work in progress	Note 10.1	4,935.5	4,250.8
Contract assets	Note 10.2	3,242.7	2,897.0
Advances to suppliers	Note 10	895.7	786.4
Accounts, notes and other current receivables	Note 10.4	7,146.2	6,269.1
Current derivatives – assets	Note 6.6	135.1	133.4
Current tax receivables	Note 7.3	160.6	194.3
Current financial assets	Note 6.2	12.5	112.2
Cash and cash equivalents	Note 6.2	4,767.1	3,979.9
Assets held for sale	Note 1.3	—	3,034.0
CURRENT ASSETS		21,295.4	21,657.1
TOTAL ASSETS		39,989.8	38,785.7

Equity and liabilities

(in € millions)	Notes	31/12/24	31/12/23
Capital, additional paid-in capital and other reserves		7,716.2	7,676.1
Cumulative translation adjustment		(108.5)	(369.8)
Treasury shares		(92.5)	(476.3)
Total attributable to shareholders of the parent company		7,515.2	6,830.0
Non-controlling interests		42.9	139.0
TOTAL EQUITY	Note 8.1	7,558.1	6,969.0
Long-term loans and borrowings	Note 6.2	4,550.9	5,720.3
Non-current derivatives – liabilities	Note 6.6	—	—
Pensions and other long-term employee benefits	Note 9.3	1,589.3	1,552.5
Deferred tax liabilities	Note 7.3	634.8	319.4
NON-CURRENT LIABILITIES		6,775.0	7,592.2
Contract liabilities	Note 10.2	11,541.1	9,788.6
Reserves for contingencies	Note 10.3	1,964.7	1,726.7
Accounts, notes and other current payables	Note 10.4	8,332.7	7,644.1
Current derivatives – liabilities	Note 6.6	352.7	187.8
Current tax payables	Note 7.3	193.0	220.5
Short-term loans and borrowings	Note 6.2	3,272.5	2,713.3
Liabilities held for sale	Note 1.3	—	1,943.5
CURRENT LIABILITIES		25,656.7	24,224.5
TOTAL EQUITY AND LIABILITIES		39,989.8	38,785.7

7.1.5. Consolidated statement of cash flows

(in € millions)	Notes	2024	2023
NET INCOME		1,344.4	1,002.9
Less, net income relating to discontinued operations		(412.1)	(74.3)
Net income relating to continued operations		932.3	928.6
Add (deduct): Income tax expense (gain)		247.3	252.2
Net interest expenses		165.8	(1.8)
Share in net income of equity affiliates	Note 5.1	(95.1)	(147.4)
Dividends received from equity affiliates	Note 5.1	124.6	123.7
Depreciation and amortisation of PPE and intangible assets	Note 4.2	1,155.4	1,045.1
Impairment of assets	Note 3.2	157.6	—
Provisions for pensions and other employee benefits	Note 9.3	148.8	170.6
Loss (gain) on disposal of assets, change in scope of consolidation and other	Note 3.2	278.9	387.9
Provisions for restructuring, net	Note 10.3	18.4	(15.6)
Other items		41.1	(39.0)
Operating cash flows before working capital changes, interest and tax		3,175.1	2,704.3
Change in working capital and reserves for contingencies	Note 10	26.1	172.7
Cash contributions to pension plans and other long-term employee benefits, o.w.:	Note 9.3	(129.9)	(1,181.5)
• UK deficit payment and buy-in		(12.5)	(1,078.2)
• Recurring contributions/benefits		(117.4)	(103.3)
Interest paid		(267.3)	(147.5)
Interest received		127.7	158.8
Income tax paid		(185.3)	(195.4)
Net cash flow from operating activities related to continued activities		2,746.4	1,511.4
Net cash flow from operating activities related to discontinued activities		(108.6)	85.0
NET CASH FLOW FROM OPERATING ACTIVITIES	- I -	2,637.8	1,596.4
Acquisitions of property, plant and equipment and intangible assets	Note 4.2	(623.1)	(625.6)
Disposals of property, plant and equipment and intangible assets	Note 4.2	6.3	4.1
Capital expenditures		(616.8)	(621.5)
Acquisitions of subsidiaries and affiliates	Note 6.3	(1,205.8)	(3,578.7)
Less cash of acquired companies		36.8	43.4
Disposals of subsidiaries and affiliates	Note 6.3	1,981.4	131.5
Less cash of companies sold		(461.3)	(22.5)
Repayment of shareholder's loans		142.6	—
Decrease (increase) in loans and non-current financial assets		(6.3)	(18.5)
Decrease (increase) in current financial assets		101.5	(80.9)
Net financial investments		588.9	(3,525.7)
Net cash flow used in investing activities related to continued activities		(27.9)	(4,147.2)
Net cash flow used in investing activities related to discontinued activities		(34.9)	(86.0)
NET CASH FLOW USED IN INVESTING ACTIVITIES	-II-	(62.8)	(4,233.2)
Parent company dividend distribution	Note 8.1	(708.4)	(633.7)
Third party share in dividend distribution of subsidiaries		(14.3)	(49.3)
Purchase of treasury shares		(275.4)	(491.0)
Issuance of debt		158.2	3,654.7
Repayment of debt		(1,155.1)	(908.7)
Net cash flow from financing activities related to continued activities		(1,995.0)	1,572.0
Net cash flow from financing activities related to discontinued activities		(7.3)	19.1
NET CASH FLOW FROM FINANCING ACTIVITIES	-III-	(2,002.3)	1,591.1
Exchange rate variation relating to continued operations	-IV-	63.7	(56.3)
Exchange rate variation relating to discontinued operations	-V-	(76.6)	12.6
CHANGE IN CASH AND CASH EQUIVALENTS (Note 6.2-b)	I+II+III+IV+V	559.8	(1,089.4)

Of which, continued activities		787.2	(1,120.1)
Of which, discontinued activities		(227.4)	30.7

The Group’s net debt position and variation are presented in Notes 6.2 and 6.3.

Note 1. Accounting standards framework

Thales’ consolidated financial statements for the year ending Thales (parent company) is a French publicly traded joint-stock

December 31, 2024 were approved and authorized for issue by its company (société anonyme) registered with the Nanterre Trade and Board of Directors on March 3, 2025. Company Register under number 552 059 024.

In accordance with French law, the financial statements will be deemed final once they have been adopted by the shareholders of the Group at the Annual General Meeting to be held on May 15, 2025.

1.1 Basis of preparation for the 2024 consolidated financial statements

Thales’ consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) approved by the European Union at December 31, 2024.

These accounting policies, as described in Note 13, are similar to those applied by the Group for the year ending December 31, 2023.

The "Pillar 2" reform of international taxation drawn up by the OECD, aimed in particular at establishing a minimum tax rate of 15%, came into force in 2024. Because of its sales level, the Group falls within the scope of this reform. The tax charge recorded in 2024 in this respect is not material.

The exception for non-recognition of deferred taxes related to Pillar 2 provided for in the amendments to IAS 12 "Income Taxes" is applied by the Group.

The amendments to IAS 1 (Non-current debt with covenants and Classification of liabilities as current and non-current), the amendment to IFRS 16 (Lease liabilities related to a sale and leaseback) and the amendments to IAS 7 and IFRS 7 (Supplier financing arrangements) have no material impact on the Group's consolidated financial statements.

1.2 New standards mandatory after December 31, 2024

At the date of publication of this document, the only text published by the IASB and adopted by the European Union, applicable after December 31, 2024, is the amendment to IAS 21 “Effect of changes in foreign exchange rates - lack of exchangeability”. This amendment should not impact the Group significantly.

1.3 Disposal of Transportation business

On May 31, 2024, Thales finalized the sale of the Transport operating sector to Hitachi Rail for an enterprise value of 1.66 billion euros.

The impact of the transaction on the Group's net debt is as follows:

	2024
Transfer price	1,920.0
Less, net cash at the date of disposal	(337.0)
Less, lease debt	75.0
Net impact of the disposal on the Group's net debt	1,658.0

In the Group’s accounts, the activity remained consolidated until the end of May 2024.

In accordance with IFRS 5, net income for the period and income from the disposal of the segment are presented within the result of discontinued operations:

Profit & Loss of discontinued operations	2024	2023
Sales	717.9	1,821.8
Income of operating activities before share in net income of equity affiliates	27.0	93.3
Share in net income of equity affiliates	2.5	2.5
Financial result	(0.7)	(13.4)
Income tax	0.4	(8.1)
Net income of Transportation business	29.2	74.3
Gain on disposal of Transportation activities	382.9	—
Net income from discontinued operations	412.1	74.3

The operating free cash flow of the Transport activities up to the date of disposal is presented below:

	2024	2023
Net cash flow from operating activities related to discontinued activities	(108.6)	85.0
Less: UK deficit payment	0.9	1.8
CAPEX	(7.8)	(29.4)
Operating free cash flow	(115.5)	57.4

1.4 Main sources of estimates

The preparation of the Group’s consolidated financial statements involves making estimates and assumptions that have an impact on the assessment of the Group’s performance and its consolidated assets and liabilities. These estimates are based on past experience and factor in the economic conditions prevailing at the end of the reporting period and any information available as of the date at which the financial statements are prepared. The judgments and estimates used by the Group to prepare the financial statements take into account the current assessment of risks induced by climate change, whether physical, regulatory, or related to customer expectations and sector commitments. In today’s global economic environment, the degree of volatility and subsequent lack of visibility are particularly high. Future facts and circumstances could lead to changes in these estimates or assumptions which could affect the Group’s financial situation, profit and loss and/or cash flows, notably with regard to:

Recognition of revenue over time (Note 10)

A significant proportion of Thales' business is carried out in the form of long-term projects, sometimes obtained in a highly competitive environment. These projects may:

• present a very high degree of technological complexity;

• have to meet very demanding operational, regulatory or contractual requirements, which may be difficult to achieve, or may evolve over time;

• face development or supply contingencies during the execution phase, which often lasts several years.

Their contractual structure (prime contractor for large systems, consortium, joint venture, public-private partnership, etc.) can also add constraints and complexity.

When these contracts are concluded on the basis of a fixed, lumpsum selling price, their actual duration and cost of development and implementation are likely to be significantly higher than estimated in the bid phase, with a negative impact on Thales'results and financial position. Moreover, in the event of failure to meet performance or schedule targets, customers may sometimes demand payment of penalties, or even terminate the contract.

The recognition of sales and margins relating to these contracts at the end of an accounting period depends mainly on:

• estimated sales and margins on completion, including provisions for technical and commercial risks;

• costs incurred to date in relation to estimated total costs on completion.

Monitoring of costs incurred to date and estimates of figures at completion are based, for each contract, on the Group’s internal systems and procedures, with Project Managers playing a key role. These estimates are reviewed regularly by the Operations and Finance departments, under the supervision of the Group’s corporate management, particularly at each end of period reporting.

Litigation (Note 10.3 and 11)

The Group conducts its business in France and abroad in complex and evolving legal and regulatory environments. As a result, it is exposed to technical and commercial disputes. The Group regularly identifies and reviews all current commercial, civil or criminal litigation and pre-litigation, and recognizes any accounting provisions that it considers to be reasonable. Uncertainties concerning litigation in progress are described in Note 11.

Business combinations

Business combinations are accounted for in accordance with the purchase accounting method described in Note 13-b: thus, on the date of the takeover of a company, the acquiree’s identifiable assets and liabilities are measured at their fair value. These valuations are performed by independent experts who base their work on assumptions and must estimate the effects of future events, which are uncertain at the acquisition date.

Goodwill (Note 4.1)

Goodwill is subject to impairment tests. The recoverable amount of goodwill is assessed based on forecasts extracted from the strategic plans prepared in accordance with Group procedures. Sensitivity tests are carried out on key assumptions in order to lend greater weight to the conclusions reached.

Pensions and other long-term employee benefits (Note 9.3)

Pensions and other long-term employee benefit commitments are estimated on statistical and actuarial bases in accordance with the policies outlined in Note 13-k. Actuarial assumptions made by the Group (discount rates, inflation rate, mortality tables, etc.) are reviewed each year with the actuaries.

Deferred tax assets (Note 7)

Deferred tax assets are recognized for tax loss carry-forwards and temporary differences between the book value and the tax value of assets and liabilities. The recoverability of these assets is assessed on the basis of forecasts of future tax results of the tax entities over a period of three to five years, the entity’s history of tax losses, past non-recurring items and tax strategies specific to each country.

Note 2. Segment information

2.1 Commercial activity and Adjusted EBIT by segment

In order to monitor the operating and financial performance of the In particular, Adjusted EBIT, presented by business segment below, entities, the Group’s management regularly considers certain key corresponds to income from operations plus the share in net income non-GAAP indicators as defined in Note 13-a, which enable them to of equity affiliates, excluding expenses related to business exclude certain non-operating and non-recurring items. combinations (amortization of acquisition-related assets (PPA) and other expenses directly linked to business combinations).

2024 Order book – non-Group at 31/12	Aerospace		Defence	Cyber & Digital		Other	Thales 50,602.2
	10,485.9		39,153.5	875.4		87.4
Order intake – non-Group	6,434.2		14,723.3	4,031.6		100.4	25,289.5
Sales – non-Group	5,470.6		10,969.3	4,023.6		113.1	20,576.6
Sales – intersegment	169.0		347.0	125.5		(641.5)	—
Total sales	5,639.6		11,316.3	4,149.1		(528.4)	20,576.6
Adjusted EBIT	391.4		1,432.0	584.9		10.3	2,418.6
• of which: Naval Group	—		—	—		93.0	93.0
• excluding Naval Group	391.4		1,432.0	584.9		(82.6)	2,325.7
Capital expenditures ^(a)	134.5		241.6	100.7		146.3	623.1
Depreciation and amortization ^(a)	101.8		167.9	94.2		115.1	479.0
2023		Aerospace	Defence	Cyber & Digital	Other			Thales
Order book – non-Group at 31/12		9,281.0	35,081.1	815.6	73.7			45,251.3
Order intake – non-Group		5,606.1	13,943.5	3,523.7	58.4			23,131.7
Sales – non-Group		5,220.6	9,628.2	3,504.2	75.4			18,428.4
Sales – intersegment		128.6	374.0	108.0	(610.6)			—
Total sales		5,349.2	10,002.2	3,612.2	(535.2)			18,428.4
Adjusted EBIT		369.1	1,270.3	490.8	2.0			2,132.1
• of which: Naval Group		—	—	—	91.2			91.2
• excluding Naval Group		369.1	1,270.3	490.8	(89.2)			2,040.9
Capital expenditures ^(a)		162.8	229.2	82.5	151.1			625.6
Depreciation and amortization ^(a)		102.4	151.7	83.9	112.4			450.4

(a) Excluding PPA and IFRS 16.

Business segments are presented in Note 13-a.

In 2024, sales include €201.3 million (€162.5 million in 2023) in other income, mainly subsidies and patent royalties. In 2024, as in 2023, the Group's activities are divided between civil customers, accounting for 46% (compared to 48% in 2023), and military customers, accounting for 54% (compared to 52% in 2023).

Order book, order intake and sales included in the “Other” column relate to corporate activities (Thales parent company, Thales Global Services, Group R&D centers, facilities management), and to the elimination of transactions between business segments.

Order Book evolution :

Unallocated Adjusted EBIT includes the Group’s share (35%) in the net income of Naval Group, corporate income from operations which is not assigned to segments, and the cost of vacant premises. Other costs (mainly the costs of foreign holding companies not invoiced) are reallocated to business segments proportionally to their respective non-Group sales.

	2024	2023
Order book at 1 January	45,251.3	40,957.2
Order intake	25,289.5	23,131.7
Sales	(20,576.6)	(18,428.4)
Change in scope and other	638.0	(409.2)
Order book at 31 December	50,602.2	45,251.3
Approximately 2/3 of this amount is expected to convert into revenue within the next 3 years.

The reconciliation between income from operations and Adjusted EBIT is analyzed as follows:

	2024	2023
Income from operations	1,698.7	1,562.3
Less, amortisation of acquisition-related assets (PPA):	534.4	380.3
• Intangible assets	461.3	357.3
• Property, plant and equipment	5.8	23.0
• Deferred revenues Less, expenses directly linked to business combinations	67.3	—
	38.6	9.7
Share in net income of equity from affiliates	95.1	147.4
Less, PPA amortisation related to equity affiliates entities	51.8	32.4
Adjusted EBIT	2,418.6	2,132.1

	31/12/24	31/12/23
France	13,729.6	11,659.5
United Kingdom	898.1	867.0
North America	2,002.6	2,545.6
Others	2,064.1	2,056.6
TOTAL	18,694.4	17,128.6

2.2 Sales by country of destination

2024	Aerospace	Defence	Cyber & Digital	Other	Thales
Country of destination: France	1,259.4	4,444.9	176.8	50.7	5,931.8
United Kingdom	162.7	971.7	215.7	5.3	1,355.4
Rest of Europe	2,377.3	1,904.9	850.1	22.9	5,155.2
Sub-total Europe	3,799.4	7,321.5	1,242.6	78.9	12,442.4
North America	785.0	907.9	1,220.8	7.0	2,920.7
Australia and New Zealand	48.5	777.0	114.0	0.5	940.0
Total mature markets	4,632.9	9,006.4	2,577.4	86.4	16,303.1
Emerging markets ^(a)	837.7	1,962.9	1,446.2	26.7	4,273.5
TOTAL	5,470.6	10,969.3	4,023.6	113.1	20,576.6
Revenue recognition method: Over time	3,320.5	9,041.6	1,350.6	78.3	13,791.0
At a point in time	2,150.1	1,927.7	2,673.0	34.8	6,785.6
TOTAL	5,470.6	10,969.3	4,023.6	113.1	20,576.6
2023	Aerospace	Defence	Cyber & Digital	Other	Thales
Country of destination: France	1,127.0	4,130.3	144.9	34.7	5,436.9
United Kingdom	135.2	866.2	203.2	3.4	1,208.0
Rest of Europe	2,245.2	1,564.4	760.4	7.7	4,577.7
Sub-total Europe	3,507.4	6,560.9	1,108.5	45.8	11,222.6
North America	788.1	721.9	1,064.0	6.8	2,580.7
Australia and New Zealand	46.6	711.6	53.5	—	811.7
Total mature markets	4,342.1	7,994.3	2,225.9	52.6	14,614.9
Emerging markets ^(a)	878.6	1,633.8	1,278.3	22.8	3,813.5
TOTAL	5,220.7	9,628.2	3,504.2	75.4	18,428.5
Revenue recognition method: Over time	3,171.6	8,100.2	851.5	55.2	12,178.5
At a point in time	2,049.0	1,528.0	2,652.7	20.2	6,249.9
TOTAL	5,220.6	9,628.2	3,504.2	75.4	18,428.4

(a) Emerging markets: all countries outside Europe, North America, Australia and New Zealand.

2.3 Non-current assets by country of origin

Note 3. Impact of changes in scope of consolidation and other non-current items

3.1 Main changes in scope of consolidation

At the beginning of October 2024, Thales finalized the acquisition of Digital Receiver Technology, Inc. from Boeing, a company specialized in software-defined radios dedicated to surveillance and intelligence for the U.S. military. The business has been consolidated since that date. The provisional goodwill amounts to €53.0 million. The purchase price allocation will be conducted during the first half of 2025.

At the beginning of May 2024, Thales finalized the acquisition of GetSAT, a company that manufactures antennas dedicated to satellite communication, notably for companies in the defense, civil aviation, and emergency services sectors. The business has been consolidated since May 1, 2024.

The Group carried out a preliminary allocation of the purchase price. After allocation to intangible assets (customer relationships and technologies totaling €41.9 million) net of tax, the residual goodwill amounts to €56.2 million. This provisional amount may be adjusted until the end of April 2025, in accordance with IFRS 3.

At the beginning of April 2024, Thales finalized the acquisition of Cobham Aerospace Communications for an amount of €941.3 million, thereby strengthening its position as a global leader in cockpit communication and secure connectivity. The company's 2023 revenue amounted to approximately €180 million.

Cobham Aerospace Communications	Fair value at acquisition date	Amortization period
Acquired customer relationships	384.4	20 years
Acquired technologies	174.1	13 to 16 years
Acquired backlog	22.7	3 years

Other tangible and intangible fixed assets 12.1

Deferred taxes		(145.3)
Other current and non-current assets and liabilities		45.5
Net cash		(71.5)
Net asset	(I)	422.0

Purchase price	(II)	941.3
Goodwill	(II) – (I)	519.3

The Group carried out a preliminary allocation of the purchase price. After allocation to intangible assets net of tax, the residual goodwill amounts to €519.3 million. This provisional amount may be adjusted until the end of March 2025, in accordance with IFRS 3. The balance sheet as of the acquisition date is as follows:

In mid-October 2023, Thales finalized the acquisition of Tesserent, one of the leading cybersecurity players in Australia and New Zealand, for an amount of €112.0 million. The business has been consolidated into the Group's accounts October 2023. The purchase price allocation was completed in 2024. After allocation to intangible assets (customer relationships amounting to €24.0 million net of tax), the residual goodwill amounts to €118.0 million.

Imperva		Fair value at acquisition date	Amortization period
Acquired customer relationships		672.4	15 to 16 years
Acquired technologies		228.7	5 to 10 years
Acquired brand		34.8	7 years
Other tangible and intangible fixed assets		25.2
Current and deferred taxes		(108.5)
Other current and non-current assets and liabilities		(52.8)
Net cash		32.7
Net asset	(I)	832.5

Purchase price	(II)	3,434.0
Goodwill	(II) – (I)	2,601.5

At the beginning of October 2023, Thales sold its aeronautical electrical systems business to Safran Electrical & Power. This business had generated approximately €145 million in revenue in 2022. The business has not been consolidated since that date.

At the beginning of December 2023, Thales finalized the acquisition of Imperva, a U.S.-based cybersecurity company specializing in data and application security, for an amount of €3,434 million. The business has been consolidated into the Group's accounts since December 1, 2023. With the integration of Imperva, Thales's expanded cybersecurity portfolio now offers complementary solutions to help clients secure their applications, data, and identities across their entire digital ecosystem. In 2024, the Group carried out an allocation of the purchase price as presented below :

3.2 Non-current income (expense) of operating activities

Disposal of investments	2024 (0.8)	2023
Disposal of investments	2024 (0.8)	85.5
Acquisition and disposal-related fees	(18.7)	(60.4)
Disposal of real estate and other tangible and intangible assets	1.7	(6.3)
Impact of settlements/amendments to pensions plans (Note 9)	(72.6)	(402.9)
Other non recurring items (a)	(188.5)	(3.8)
Disposal of assets, changes in scope of consolidation and other	(278.9)	(387.9)

Impairment of fixed assets	—	—
Other impairment	(157.6)	—
Impairment of assets (a)	(157.6)	—

(a) Impact of revisions to the value of certain assets and contracts, and related liabilities.

Note 4. Property, plant and equipment and intangible assets

4.1 Goodwill

a) Change in goodwill

Goodwill is allocated to cash-generating units (CGUs) or groups of CGUs corresponding to Thales’ Global Business Units (GBU):

	01/01/24	Acquisitions	Disposals Reclassification Exchange rate & other					31/12/24
Avionics ^(a)	443.2	519.3	—		—		0.4	962.9
Space	493.8	—	—		—		(5.8)	488.0
Secured Communications and Information Systems ^(b)	750.6	109.2	—		(28.5)		2.2	833.5
Land and Air Systems	322.0	13.2	—		—		0.7	335.9
Defence Mission Systems	505.2	—	—		—		1.7	506.9
Cyber & Digital ^(c)	6,424.8	(889.0)	—		28.5		207.7	5,772.0
TOTAL	8,939.6	(247.3)	—		—		206.9	8,899.2
	01/01/23	Acquisitions	Disposals	Reclassification		Exchange rate & other			31/12/23
Avionics	443.6	15.0	(15.0)	—		(0.4)			443.2
Space	492.1	—	—	—		1.7			493.8
Secured Communications and Information Systems	777.2	(22.9)	—	—		(3.7)			750.6
Land and Air Systems	322.6	—	—	—		(0.6)			322.0
Defence Mission Systems	508.6	—	—	—		(3.4)			505.2
Cyber & Digital ^(c)	2,925.9	3,571.7	—	—		(72.8)			6,424.8
TOTAL	5,470.0	3,563.8	(15.0)	—		(79.2)			8,939.6

(a) Preliminary goodwill on Cobham Aerospace Communications amounts to €519.3 million after purchase price allocation.

(b) Preliminary goodwill on the acquisition of Get SAT amounts to €56.2 million after purchase price allocation.

(c) Imperva’s goodwill (€3,466.5 million) recognized in 2023 has been allocated in 2024 to intangible assets and deferred revenues for a net amount after deferred tax of €865 million. The final goodwill amounts to €2,601.5 million.

Tesserent’s goodwill (€142.0 million) recognized in 2023 has been allocated in 2024 to intangible assets for a net amount after deferred tax of €24.0 million. The final

goodwill amounts to €118,0 million.

b) Impairment tests

Goodwill as well as cash-generating units (CGUs) are subject to annual impairment tests in accordance with the Group’s budgetary timetable. All other intangible assets and property, plant and equipment are tested at the CGU level.

For these tests, the value in use is based on discounted future operating cash flows over a three-year period and a terminal value. In certain specific cases (recent acquisitions, non-typical annual results, etc.), the terminal value is based on forecasts over an appropriate period of time.

In the specific case of the Space CGU, terminal value has been calculated on the last year of the 5-year business plan, which notably takes into account :

- a favorable outlook for the Observation, Exploration & Science,

Navigation and Military Telecommunications businesses ;

- the adaptation plan implemented and ;

- the Group's investments in research and development, which should enable us to restore the profitability of our space business over the long term, with the aim of achieving an Adjusted EBIT margin of around 7% by the end of the plan.

At the end of 2024, cash flows utilized for the tests came from the budget prepared for the following two years, established in accordance with Group procedures, and extended over the next year. The construction of the third year's flow stems from the strategic business plan. This strategic plan, historically completed by each GBU during the first semester, is confirmed or revised (if necessary) at the end of December, as part of the impairment test.

These cash flows reflect management’s best estimate in the current economic context. At the end of 2024, impairment tests were performed using a discount rate assumption of 8% (same as at the end of 2023) for all CGUs, the specific risks of the CGUs being taken into account in the projections.

The assumptions used for business growth and terminal value are based on a reasonable approach specific to each sector (terminal value generally based on the average income from operations over the three years, growth rate limited to 2%).

On the basis of the values in use, the Group also tested the sensitivity of all CGUs to changes in key assumptions. Taken individually, an increase by 1 point of the discount rate, a decrease by 1 point of the growth rate or a decrease by 2 points in operating profitability over the standard year would not lead to the recognition of any impairment loss.

Furthermore, as part of its low-carbon strategy, the Group is implementing action plans aimed at reducing operational CO_² emissions, accelerating innovation, and generalizing ecodesign initiatives. The potential impact of these initiatives on cash flows has been integrated into the relevant CGU business plans for the requirements of impairment tests. Based on the analyses conducted as part of the Group’s internal work on climate change, the Group has not identified any significant climate-related risk, whose financial consequences would be likely to lead to a loss of value of its assets.

4.2 Property, plant and equipment and other intangible assets a) Change in net assets

	01/01/24	Acquisitions	Disposal	Depr. and amort.		Change in scope and exch. rate		31/12/24
Acquired Intangible assets (note 3.1)	1,119.9	—	—	(461.3)		1,690.2		2,348.8
Capitalised development costs	42.0	21.4	—	(20.8)		(0.3)		42.3
Other intangible assets	126.2	62.0	(0.1)	(45.9)		(0.6)		141.6
Intangible assets	1,288.1	83.4	(0.1)	(528.0)		1,689.3		2,532.7
Right-of-use from lease contracts	1,352.1	142.8	—	(209.3)		(3.6)		1,282.0
Acquired tangible assets	5.8	—	—	(5.8)		—		—
Property, plant and equipment	2,238.2	539.7	(6.2)	(412.3)		74.1		2,433.5
Tangible assets	3,596.1	682.5	(6.2)	(627.4)		70.5		3,715.5
TOTAL	4,884.2	765.9	(6.3)	(1,155.4)		1,759.8		6,248.2
Less, new lease contracts		(142.8)	—
Capital expenditures ^(a)		623.1	(6.3)
	01/01/23	Acquisitions	Disposal		Depr. and amort.		Change in scope and exch. rate		31/12/23
Acquired Intangible assets	1,401.7	—	—		(357.3)		75.5		1,119.9
Capitalised development costs	40.6	20.2	—		(20.2)		1.4		42.0
Other intangible assets	123.5	65.4	(0.2)		(55.9)		(6.6)		126.2
Intangible assets	1,565.8	85.6	(0.2)		(433.4)		70.3		1,288.1
Right-of-use from lease contracts	1,400.7	166.3	—		(214.4)		(0.5)		1,352.1
Acquired tangible assets	28.8	—	—		(23.0)		—		5.8
Property, plant and equipment	2,049.4	540.0	(3.9)		(374.3)		27.0		2,238.2
Tangible assets	3,478.9	706.3	(3.9)		(611.7)		26.5		3,596.1
TOTAL	5,044.7	791.9	(4.1)		(1,045.1)		96.8		4,884.2
Less, new lease contracts		(166.3)	—
Capital expenditures ^(a)		625.6	(4.1)

(a) As presented in the statement of cash flows.

b) Breakdown by item

31/12/24 31/12/23

	Gross	Depreciation	Net
Technologies acquired	2,236.6	(1,565.4)	671.2
Customer relationships acquired	2,085.2	(553.5)	1,531.7
Order book acquired	76.0	(74.1)	1.9
Other intangible assets	437.5	(293.5)	144.0
Acquired intangible assets (business combinations)	4,835.3	(2,486.5)	2,348.8
Development costs	948.6	(906.3)	42.3
Other intangible assets	1,181.7	(1,040.1)	141.6
Intangible assets	6,965.6	(4,432.9)	2,532.7
Right-of-use from lease contracts	2,332.4	(1,050.4)	1,282.0
Land	65.3	(1.8)	63.5
Buildings	2,587.2	(1,741.0)	846.2
Technical facilities, industrial equipment and tooling	4,151.0	(3,252.7)	898.3
Other property, plant and equipment	1,497.8	(872.3)	625.5
Property, plant and equipment	10,633.7	(6,918.2)	3,715.5

Note 5. Investments in equity affiliates

5.1 Change in investments in equity affiliates

	31/12/24	31/12/23
Investments at opening	1,648.4	1,589.3
Share in net income of equity affiliates	95.1	147.4
Translation adjustment	4.4	(20.3)
Cash flow hedge	(2.6)	39.3
Actuarial gains (losses) on pensions	6.6	(3.7)
Share in comprehensive income of equity affiliates	103.5	162.7
Dividends paid	(124.6)	(123.7)
Dividends voted and not yet paid	6.5	2.2
Change in scope and other	14.4	17.9
Investments at closing	1,648.2	1,648.4
Including Naval Group	882.4	841.7

5.2 Naval group: summary of financial information

Thales holds 35% of the capital of Naval Group and participates Naval Group is a group specialized in the naval defence industry. jointly with the French government in the governance of the The financial statements of Naval Group, as restated in Thales’ company. financial statements (PPA), are as follows:

Balance sheet (100% interest)	31/12/24	31/12/23
Non-current assets	1,917.7	1,982.5
Current assets	5,742.3	4,811.8
Total assets	7,660.0	6,794.3
Restated equity, attributable to shareholders	1,686.8	1,570.6
Non-controlling interests	0.4	0.4
Non-current liabilities	352.2	321.6
Current liabilities	5,620.6	4,901.7
Total equity and liability	7,660.0	6,794.3

Net Cash	506.7	1,200.4
Thales share	31/12/24	31/12/23
Thales’ share (35%) in restated equity	590.4	549.7
Goodwill	292.0	292.0
Share in net assets of Naval Group	882.4	841.7
Income statement (100% interest)	2024	2023
Sales	4,354.6	4,257.4
Income (loss) from operating activities, after share in net income of equity affiliates	253.6	188.3
Financial income (loss)	42.1	45.7
Tax	(66.6)	(52.1)
Discontinued activities	3.9	(1.1)
Restated net income	233.0	180.8
• of which, attributable to shareholders of the company	233.0	180.8
• of which, attributable to non-controlling interests	—	—
Thales share	2024	2023
Thales’ share in net income attributable to shareholders of the company	81.6	63.3
• of which, PPA amortisation	(11.5)	(28.0)
Share in net income, before PPA	93.1	91.3

Dividends received from Naval Group	45.3	59.1

5.3 Commitments and related parties

a) Commitments toward equity affiliates

At December 31, 2024, outstanding sureties, endorsements and The Group’s policy is to issue these commitments only in proportion guarantees granted by Thales S.A. (parent company) to support its to its equity interest, or to obtain counter-guarantees from the other joint ventures amounted to €57.7 million (€240.5 million at shareholders in proportion to their interest. December 31, 2023). The Group has no significant off-balance sheet commitments to associates.

b) Transactions with equity affiliates

The volume of transactions with equity affiliates is as follows:

	2024	2023
Sales	428.7	396.0
Purchases	218.8	221.2
Loans and current accounts receivables	65.0	71.0
Borrowings and current accounts payables	—	—

Note 6. Financing and financial instruments

6.1 Financial income

a) Net interest income

	2024	2023
Financial interests related to lease contracts	(35.6)	(31.0)
Other interest expenses ^(a)	(253.7)	(128.6)
Interest income on cash and cash equivalents	123.5	161.4
TOTAL	(165.8)	1.8

(a) This amount includes -18.1 million in 2024 and -18.0 million in 2023 for rate swaps.

b) Other financial income

	2024	2023
Foreign exchange gains (losses)	(1.7)	(26.0)
Cash flow hedges, ineffective portion	1.7	(2.0)
Change in fair value of derivatives ^(a)	4.1	(27.5)
Other	35.3	(9.5)
TOTAL	39.4	(65.0)

(a) This amount mainly includes the change in the fair value of swap points (-€1.7 million in 2024, -€22.3 million in 2023).

6.2 Net cash (debt)

Group net cash (debt) is as follows:

		31/12/24	31/12/23 *
Current financial assets		12.5	112.2
Cash and cash equivalents		4,767.1	3,979.9
Cash and other short-term investments	(A)	4,779.6	4,092.1
Financial debt		6,430.9	6,979.2
Lease debt		1,392.3	1,454.9
Gross debt ^(a)	(B)	7,823.2	8,434.1
Net cash (debt) relating to continued operations	(A-B)	(3,043.6)	(4,342.0)
Net cash relating to discontinued operations	(C)	—	152.0
NET CASH (DEBT)	(A-B+C)	(3,043.6)	(4,190.0)
^(a) Including: • Long-term financial debt		4,550.9	5,720.3
• Short-term financial debt		3,272.5	2,713.3
• Fair value of interest rate hedging derivatives		(0.2)	0.5

* The definition of net debt has been revised to exclude investments taken over from the UK pension fund (£165.2 million at 31 December 2023). a) Current financial assets

	31/12/24	12/31/23
Short-term deposits ^(a)	0.9	100.6
Current accounts receivable with related parties	6.0	8.9
Accrued interests	5.6	2.7
CURRENT FINANCIAL ASSETS	12.5	112.2

^(a) Current financial assets include deposits with tier-one banks on deposit accounts with a maturity between 3 and 12 months.

b) Cash and cash equivalents

At December 31, 2024, cash recorded under consolidated assets amounted to €4,767.1 million (€3,979.9 million at December 31, 2023) and included:

• €3,910.9 million held by the parent company and available for immediate use (€3,345.4 million in 2023). These amounts include €3,376.8 million (€2,614.6 million in 2023) in very short-term deposits with tier-one banks or money market funds (UCITS);

• €856.2 million in the credit balances of subsidiaries (€634.5 million in 2023), most of them outside France. This figure includes payments received in the last days of the financial year and subsequently transferred to the cash pooling account.

The reconciliation with the cash flow statements is as follows:

	31/12/24	31/12/23
Cash and cash equivalents at opening	4,207.3	5,296.4
o.w.: Cash and cash equivalents relating to continued operations at opening	3,979.9	5,099.6
o.w.: Cash and equivalents relating to discontinued operations at opening	227.4	196.8
Cash and cash equivalents at closing	4,767.1	4,207.3
o.w.: Cash and cash equivalents relating to continued operations at closing	4,767.1	3,979.9
o.w.: Cash and equivalents relating to discontinued operations at closing	—	227.4

c) Financial debt

	31/12/24	12/31/23
Bond issues	4,500.0	5,000.0
NEU CP (treasury bills)	1,455.3	1,745.1
Current accounts in credit with related parties	330.3	181.3
Bank overdrafts	12.4	8.7
Accrued interests and other debts	132.9	44.1
FINANCIAL DEBT	6,430.9	6,979.2

Bonds issues at December 31, 2024

Nominal value Issue date Maturity Type of rate Coupon Effective rate

					Before hedging	After hedging
€ 500 million	Jan. 2018	Jan. 2025	fixed	0.75%	0.91%	0.91%
€ 600 million	Oct. 2023	Oct. 2025	fixed	4.00%	4.26%	4.26%
€ 500 million	Nov. 2020	March 2026	fixed	0.00%	0.08%	0.08%
€ 500 million	Jan. 2020	Jan. 2027	fixed	0.25%	0.33%	0.33%
€ 700 million	May 2020	May 2028	fixed	1.00%	1.10%	1.10%
€ 600 million	Oct. 2023	Oct. 2028	fixed	4.13%	4.28%	4.28%
€ 500 million	June 2023	June 2029	fixed	3.63%	3.83%	3.83%
€ 600 million	Oct. 2023	Oct. 2031	fixed	4.25%	4.42%	4.42%

Financial debt by maturity

31/12/24	Total						Maturity
			2025		2026		2027	2028		>2028
Financial debt	6,430.9		3,044.0		500.1		499.9	1,295.4		1,091.5
Contractual cash flows	6,894.4		3,169.2		577.2		577.4	1,376.0		1,194.6
31/12/23		Total					Maturity
				2024		2025	2026		2027		>2027
Financial debt		6,979.2		2,498.9		1,097.5	499.7		499.4		2,383.7
Contractual cash flows		7,565.9		2,635.8		1,205.2	577.1		577.2		2,570.6

Financial debt by currency

	31/12/24	31/12/23
Euro	6,429.1	6,973.2
Others	1.8	6.0
TOTAL	6,430.9	6,979.2

Change in financial debt

	01/01/24	Cash flow		Other changes		31/12/24
	01/01/24	Cash flow	Scope	Exchange rates	Other	31/12/24
Financial debt	6,979.2	(774.8)	188.0	53.8	(15.3)	6,430.9

Other changes

Scope Exchange rates Other

Financial debt 3,970.7 2,965.1 43.3 (6.7) 6.8 6,979.2

In 2024, the “cash flow” column includes the repayment of the bond maturing in April 2024, as well as an emission of NEU CP. In 2023, the “cash flow” column includes the repayment of the bonds maturing in June 2023, as well as the emission of NEU CP.

The “other” column includes issuance costs for new bonds, changes in the value of derivatives used to hedge bonds and changes in the value of debt on acquisition of subsidiaries.

d) Lease debt

Change in lease debt

	01/01/24	Cash flow ^(a)		Other changes		31/12/24
	01/01/24	Cash flow ^(a)	Scope	Exchange rates and other	New debt ^(b)	31/12/24
Lease debt	1,454.9	(222.1)	4.9	11.8	142.8	1,392.3

Other changes

Scope Exchange rates New debt ^(b)

and other

Lease debt 1,505.3 (219.1) 8.8 (6.4) 166.3 1,454.9

(a) Share of lease payments corresponding to the repayment of lease debt.

(b) New lease contracts signed during the year and impact of the renegotiation of existing leases.

Debt maturity

31/12/24	Total					Maturity
			2025		2026	2027		2028		>2028
Lease debt accounted in the BS	1,392.3		228.3		206.0	180.9		158.7		618.4
Contractual cash flows	1,551.4		261.1		232.8	203.5		177.1		676.9
31/12/23		Total					Maturity
				2024	2025		2026		2027		>2027
Lease debt accounted in the BS		1,454.9		214.9	203.7		180.5		156.2		699.6
Contractual cash flows		1,614.9		245.4	229.7		202.5		175.0		762.3

6.3 Changes in net debt

	2024	2023 *
NET CASH (DEBT) AT OPENING	(4,190.0)	(35.2)
Net cash flow from operating activities relating to continued operations	2,746.4	1,511.4
Less, contributions to reduction of UK pension deficit and buy-in (Note 9.3)	12.5	1,078.2
Capital expenditures relating to continued operations	(616.8)	(621.5)
Free operating cash flow relating to continued operations	2,142.1	1,968.1
Net acquisitions of subsidiaries and affiliates ^(a)	358.8	(3,463.8)
Of which, Cobham Aerospace Communications	(1,012.8)	—
Of which, Imperva	5.8	(3,401.0)
Of which, Transport business	1,658.0	—
Of which, other	(292.2)	(62.8)
Contributions to reduction of UK pension deficit and buy-in (Note 9.3)	(12.5)	(1,078.2)
Changes in loans	(6.3)	(208.6)
Dividends paid by the parent company	(708.4)	(633.7)
Third-party share in dividend distributions of subsidiaries	(14.3)	(49.3)
Purchase of treasury shares ^(b)	(275.4)	(491.0)
New lease debts	(142.8)	(166.3)
Changes in exchange rates and other	(42.8)	(64.1)
Contribution to change in net cash (debt) of continued operations	1,298.4	(4,186.9)
Contribution to change in net cash (debt) of discontinued operations	(152.0)	32.1
NET CASH (DEBT) AT CLOSING	(3,043.6)	(4,190.0)

* The definition of net debt has been revised to exclude investments taken over from the UK pension fund (£165.2 million at 31 December 2023). (a) Net of cash (debt) of companies acquired/divested and repayments of shareholders’ loans.

(b) Including, in 2024, -€176.4 million linked to a share buy back plan for their cancellation (-€461.3 million in 2023).

6.4 Non-current financial assets

a) Non-consolidated investments

Non-consolidated investments amounted to €160.6 million at the end of 2024 compared to €129.2 million at the end of 2023. At the end of 2024, this item is composed of individually non-material investments.

b) Non-current financial assets

	31/12/24	31/12/23
Loans to related parties	65.0	71.0
Investments taken over from the UK pension fund (Note 9.3)	205.0	190.1
Loans and other financial assets at amortised cost	47.1	41.7
Loans and other financial assets at market value	66.0	59.7
Gross value	383.1	362.5
Impairment	(11.5)	(18.6)
NET	371.6	343.9

6.5 Summary of financial assets and liabilities

At end 2024, the classification of financial assets and liabilities Receivables, payables and refundable grants are financial assets remained identical to the one disclosed at end 2023. and liabilities as defined by IAS 32 and IFRS 9, and are measured at amortized cost. They are detailed in Note 10.

31/12/24 31/12/23

	At amortised cost	Fair value through:				Accounting value	Fair value
	At amortised cost	Profit or loss		Equity	Equity with P&L reclass.	Accounting value	Fair value
Non-current financial assets: Non-consolidated investments	—	—		160.6	—	160.6	160.6
Non-current loans and financial assets	100.6	271.0		—	—	371.6	371.6
Derivatives documented as hedges	—	—		—	—	—	—
Current financial assets: Derivatives documented as hedges	—	0.2		—	133.7	133.9	133.9
Derivatives not documented as hedges	—	—		—	1.2	1.2	1.2
Current financial assets	12.5	—		—	—	12.5	12.5
Cash and cash equivalents	1,690.3 3,076.8			—	—	4,767.1	4,767.1
Non-current financial liabilities: Long-term debt	4,550.9		—	—	—	4,550.9	4,493.5
Derivative documented as hedges	—		—	—	—	—	—
Current financial liabilities: Derivatives documented as hedges	—		—	—	342.0	342.0	342.0
Derivatives not documented as hedges	—		10.7	—	—	10.7	10.7
Short-term debt	3,272.5		—	—	—	3,272.5	3,378.9

Accounting value	Fair value
129.2	129.2
343.9	343.9
—	—
133.4	133.4
—	—
112.2	112.2

The valuation methods used for financial assets and liabilities are described in Note 13-i.

6.6 Financial risk

a) Market risk

Thales hedges its foreign exchange and interest rate risks using over-the-counter derivatives from tier-one banks. The book value of derivatives used to manage the Group’s market risks is presented below.

		31/12/24
	Assets	Liabilities
Current derivatives:	134.9	352.7
• Foreign exchange derivatives	134.9	352.7
• Interest-rate derivatives	0.2	—
Foreign exchange derivatives, net	(217.8)
Interest-rate derivatives, net	0.2

	31/12/23
Assets	Liabilities
133.4	186.8
—	1.0
(53.4)
(1.0)

Foreign exchange risk

Thales hedges currency risks arising in connection with the negotiation of contracts denominated in currencies other than the main production currency, currency risks generated by ordinary commercial operations, risks relating to cash pooling and, in some cases, risks relating to its net investments in foreign operations.

At December 31, 2024 and 2023, the amount of derivatives in the portfolio can be analyzed as follows:

Negociations and trade operations hedges	Nominal value				Market value
Negociations and trade operations hedges	USD GBP Other			Total	Market value
Documented as hedges Forward currency sales	4,115.5 1,212.6 1,878.3			7,206.4	(102.6)
					(102.6)
Forward currency purchases	1,920.5 1,169.1 2,175.8			5,265.4	0.5
Currency sales (call and put options)	14.4	94.5	—	108.9

Currency purchases (call and put options)	52.9	29.7	2.1	84.7
Not documented as hedges Forward currency sales	69.5	49.3	4.1	122.9	(0.2)
					(0.2)
Forward currency purchases	50.2	58.8	13.6	122.6	0.2
Currency purchases (call and put options)	—	—	29.9	29.9	0.2
Hedges related to cash pooling (documented as hedges) Currency sales: currency swaps	868.0	30.2	257.0	1,155.2	(21.7)
					(21.7)
Currency purchases: currency swaps	83.5	404.0	534.3	1,021.8
Hedges related to net investments in foreign operations (hedge accounting) Currency sales: currency swaps	693.0	—	—	693.0	(84.5)
					(84.5)
Currency purchases: currency swaps	—	602.4	—	602.4
Hedges related to net investments in foreign operations (not documented as hedges) Currency sales: currency swaps	82.3	—	—	82.3	(9.5)
					(9.5)
Currency purchases: currency swaps	—	72.5	—	72.5
Hedges related to net investments in foreign operations (not documented as hedges) Currency sales (call and put options)	—	—	—	—	—
					—
Currency purchases (call and put options)	—	—	—	—
Currency purchases: currency swaps	—	—	—	—	—
NET ASSETS (LIABILITIES)					(217.8)

108.5

97.4

The maturity of the derivatives used to hedge commercial contracts is typically less than three years. Currency swaps are set up to align the maturities of derivatives to the maturities of hedged contracts. Other characteristics of the derivatives are consistent with the ones of the hedged risk.

The change in value of financial instruments (forward transactions) used to hedge cash flow is recognized in equity for the spot rate component. A decrease (increase) of 5% in the dollar against the euro, pound sterling, Canadian dollar or Australian dollar would have had a positive (negative) impact on equity of approximately €113 million at December 31, 2024 and €82 million at December 31, 2023.

The change in value of derivative instruments matched with commercial tender portfolio, which are not eligible for hedge accounting, is recognized in profit and loss. A decrease (increase) of 5% in the dollar against the euro, pound sterling, Canadian dollar or Australian dollar would have no impact on profit or loss at December 31, 2024, as at December 31, 2023.

Interest rate risk

Thales is exposed to interest-rate volatility and in particular its impact on the conditions associated with variable-rate financing. To limit this risk, Thales operates an active interest-rate hedging policy. At December 31, 2023 and 2024, the amount of derivatives in the portfolio was as follows:

Fair value hedge (swaps with variable rate payables):	31/12/24		31/12/23
Fair value hedge (swaps with variable rate payables):	Nominal	Market value	Nominal	Market value
• swaps related to NEU CP	670.0	0.2	1,700.0	(0.5)
		0.2		(0.5)
Cash flow hedge (swaps with fixed rate payables): • pre-hedging swap related to future issue of NEU CP	(50.0)	—	—	—
• pre-hedging swap related to bond maturing in 2024 ^(a)	—	—	—	(0.5)
		—		(0.5)
• swap with fixed-rate payable, hedging a loan	—	—	—	—
NET ASSETS		0.2		(1.0)

(a) €500 million swaps set up prior the bond issue, and reversed on the issue date (April 2018).

The table below summarises the Group’s exposure to interest rate risk before and after hedging.

Total
Fixed-rate	Variablerate
(5,971.9)	(459.0)
—	4,779.6
(5,971.9)	4,320.6
620.0	(620.0)
(5,351.9)	3,700.6

Fixed-rate	Variablerate
(3,383.6)	(3.3)
—	—
(3,383.6)	(3.3)
(50.0)	50.0
(3,433.6)	46.7

	Fixed-rate	Variablerate
Financial debt	(2,588.3)	(455.7)
Financial assets, cash and cash equivalents	—	4,779.6
Net exposure before impact of derivative instruments	(2,588.3)	4,323.9
Hedging derivatives	670.0	(670.0)
Net exposure after impact of derivative instruments	(1,918.3)	3,653.9

31/12/24 < 1 year > 1 year

31/12/23 < 1 year > 1 year Total

	Fixed-rate	Variablerate
Financial debt	(2,282.9)	(216.0)
Financial assets, cash and cash equivalents	—	4,092.1
Net exposure before impact of derivative instruments	(2,282.9)	3,876.1
Hedging derivatives	1,699.8	(1,699.8)
Net exposure after impact of derivative instruments	(583.1)	2,176.3

Fixed-rate	Variablerate
(4,476.2)	(4.1)
—	—
(4,476.2)	(4.1)
—	—
(4,476.2)	(4.1)

Fixed-rate	Variablerate
(6,759.1)	(220.1)
—	4,092.1
(6,759.1)	3,872.0
1,699.8	(1,699.8)
(5,059.3)	2,172.2

Based on the Group’s average net cash, taking into account hedging instruments, a 1-point rise in interest rates would increase net interest income by €19.0 million in 2024 (€33.5 million in 2023).

b) Customer credit risk

Credit risk relates to the risk that a party to a contract will default on its commitments or fail to pay what it owes.

Credit risk relating to governmental customers

Governmental customers account for around 60% of Thales’ sales. Some of the countries with which Thales works could present a significant credit risk which could, for example, lead them to suspend an order in production, or render them unable to pay on delivery, as agreed under the terms of the contract. To limit its exposure to these risks, Thales takes out insurance with export credit agencies (such as Bpifrance) or private insurers.

In 2024, only three customers accounted for annual sales in excess of €500 million: the French government (around €4.2 billion versus €3.9 billion in 2023), the UK government (around €1.0 billion versus €0.8 billion in 2023), and the Australian government (around €0.7 billion versus €0.6 billion in 2023).

At December 31, 2024, these three countries had first-class or highquality ratings (France: AA- by S&P Global Ratings and Aa3 by Moody’s; the United Kingdom: AA by S&P Global Ratings and Aa3 by Moody’s; Australia: AAA by S&P Global Ratings and Aaa by Moody’s).

Risk of default relating to non-governmental customers

Non-governmental customers (private critical infrastructure operators, aircraft operators, etc.) account for approximately 40% of Thales’ sales. These customers may encounter major and/or prolonged financial difficulties that could lead to payment defaults or order cancellations. Such occurrences could have a negative impact on the Group’s sales, profitability and financial position.

To mitigate these risks, Thales conducts regular analyses of the ability of its customers to meet their obligations. When necessary, Thales may request bank guarantees or corporate guarantees, or may use credit insurers.

The Group’s Finance Department consolidates all the information relating to the Group’s exposure to credit risk, notably by identifying and analyzing the aging of overdue accounts and notes receivable that have not been impaired. At December 31, 2024 and 2023, the aging of these accounts and notes receivable is as follows:

31/12/24	Total		Unmatured receivables		Receivables past due:
					Less than 3 3 to 6 months months		More than 6 months
Accounts receivable, gross	4,549.4		3,198.4		1,076.7 65.1		209.2
Accounts receivable, depreciation	(131.0)		(73.2)		(8.9) (1.6)		(47.3)
Accounts receivable, net	4,418.4		3,125.2		1,067.8 63.5		161.9
31/12/23		Total		Unmatured receivables	Receivables past due:
					Less than 3 3 to 6 m months	onths	More than 6 months
Accounts receivable, gross		3,996.1		2,976.1	749.8	96.9	173.3
Accounts receivable, depreciation		(137.9)		(72.4)	(6.0)	(4.2)	(55.3)
Accounts receivable, net		3,858.2		2,903.7	743.8	92.7	118.0

Credit risk related to banking counterparties

Financial investments are diversified. They relate to first ranking debt These conditional offsetting agreements do not meet the eligibility and are negotiated with tier-one banks. criteria within the meaning of IAS 32 for offsetting derivative instruments recorded on the balance sheet under assets and

Thales trades over-the-counter derivatives with tier-one banks under liabilities. However, they do fall within the scope of disclosures to be

agreements which provide for the offsetting of amounts payable and provided under IFRS 7 on offsetting. receivable in the event of default by one of the contracting parties.

31/12/24	Gross value (before offset)	Offset amounts on balance sheet	Net presented in balance sheet	Impact of other offsetting agreements		Net
31/12/24	Gross value (before offset)	Offset amounts on balance sheet	Net presented in balance sheet	Offsetting Financial collate agreements	ral	Net
Derivatives – Assets	135.1	—	135.1	(111.0)	—	24.1
Derivatives – Liabilities	352.7	—	352.7	(111.0)	—	241.7

31/12/23 Gross value Offset amounts Net presented Impact of other offsetting agreements Net

(before offset) on balance in balance sheet Offsetting Financial collateral

^sheet agreements

Derivatives – Assets	133.4	—	133.4	(101.0)	—	32.4
Derivatives – Liabilities	187.8	—	187.8	(101.0)	—	86.8

c) Liquidity risk

The Group’s liquidity risk is the risk of not being able to meet its cash needs out of its financial resources. In particular, it relates specifically to Thales’ level of exposure to changes in the main market indicators that could lead to an increase in the cost of credit or even to a temporary limitation of access to external sources of financing.

The Group manages this risk by trying to anticipate its cash needs and ensures that these are covered by the Group’s short-term and long-term financial resources, as follows:

• shareholders’ equity (Note 8.1);

• financial debt (Note 6.2, including its breakdown by maturity);

• confirmed bank credit line, undrawn as of December 31, 2024, amounting to €1,500 million and maturing in 2028;

• as well as a commercial paper program (NeuCP).

The Group consolidates and pools its cash surpluses and needs for its various businesses, allowing it to simplify the cash management of those businesses by managing a consolidated position and accessing the financial markets through the Thales parent company, which is rated by S&P Global Ratings (A-, stable outlook) and Moody’s (A2, stable outlook).

The Group’s funding agreements contain no covenants linked to changes in Thales’ credit rating. A lower credit rating would result in an (capped) increase in the margins applicable to the undrawn confirmed bank credit line mentioned above; symmetrically, a higher rating would lead to a decrease in the applicable margin (with a floor).

The undrawn confirmed credit line also includes a clause reducing the margin used to calculate the non-utilization fee applicable if greenhouse gas emissions are reduced. As the reduction targets were achieved by December 31, 2023, the Group benefited from a reduction in the cost of the non-utilization fee for 2024. This benefit was paid by the Group to the Thales Solidarity Foundation.

Note 7. Income tax

The income tax expense takes into account specific local tax rules, including the tax consolidation systems in France and the United States, Group Relief in the United Kingdom, tax consolidation in USA, and Organschaft rules in Germany.

7.1 Income tax expense

	2024	2023
Current tax	(442.5)	(400.8)
Deferred tax	195.1	148.6
TOTAL	(247.4)	(252.2)

Reconciliation between theoretical and actual tax expense

	2024	2023
Net income	1,344.4	1,002.9
Less: net income of discontinued activities	(412.1)	(74.3)
Less: share in net income of equity affiliates	(95.1)	(147.4)
Less: income tax	247.3	252.2
Net income before tax and share in net income of equity affiliates	1,084.5	1,033.4
Theoretical average tax rate	26.6%	24.4%
Theoretical tax benefit (expense)	(288.5)	(252.5)
Reconciliation items: • Impact of tax credits	76.6	71.5
• Impact of reduced tax rates	33.7	27.2
• Taxes not taken into account in the theoretical rate	(36.2)	(28.8)
• Impact of dividends paid	(11.0)	(12.1)
• Impact of tax rates changes on deferred tax	(3.3)	(0.9)
• Change in provision for deferred tax assets	(47.0)	(74.7)
• Adjustments in respect of prior periods	19.0	3.2
• Other	9.3	14.9
Income tax benefit (expense) recognized in profit and loss	(247.4)	(252.2)
Effective tax rate	22.8%	24.4%

The theoretical average tax rate corresponds to the sum of theoretical taxes of consolidated companies, divided by the consolidated net income before tax and share in net income of equity affiliates.

The theoretical tax of each consolidated company corresponds to the application of the local tax rate to net income before tax. Accordingly, the theoretical average tax rate reflects the relative contribution of the different countries to the Group’s consolidated net income. France, which has a tax rate of 25.83%, represented almost 60% of income before tax in 2024 (55% in 2023).

The impact of tax credits includes:

• the impact of tax exemption on research tax credits in France (€180.6 million in 2024, €172.6 million in 2023);

• the tax benefits related to research activities that are recognized in income tax (notably in the United States, the Netherlands, Canada, and Australia).

The line “impact of reduced tax rates” includes the effect of the 10.3% tax rate in France on the royalties of patents and deeds of industrial property.

“Taxes not taken into account in the theoretical rate” mainly include state taxes in the United States and the IRAP in Italy.

7.2 Deferred tax recognized in equity

7.3 Tax assets and liabilities presented on the balance sheet

	01/01/24	Income (expense)	Equity	Cash flow	Scope & exch. rates	Other	31/12/24
Current income tax assets	194.3	(120.5)	—	66.7	20.1	—	160.6
Current income tax liabilities	(220.5)	(322.0)	—	118.6	(5.8)	236.7	(193.0)
Current income tax, net	(26.2)	(442.5)	—	185.3	14.3	236.7	(32.4)
Deferred tax assets	1,183.3	70.0	(30.9)	—	112.1	32.1	1,366.6
Deferred tax liabilities	(319.4)	125.1	—	—	(440.5)	—	(634.8)
Deferred tax, net	863.9	195.1	(30.9)	—	(328.4)	32.1	731.8

TOTAL (247.4) (30.9) 185.3

	01/01/23	Income (expense)	Equity	Cash flow	Scope & exch. rates	Other	31/12/23
Current income tax assets	194.7	(62.2)	—	84.6	(2.9)	(19.9)	194.3
Current income tax liabilities	(168.2)	(338.6)	—	110.8	(6.3)	181.8	(220.5)
Current income tax, net	26.5	(400.8)	—	195.4	(9.2)	161.9	(26.2)
Deferred tax assets	1,043.0	52.2	17.4	—	65.7	5.0	1,183.3
Deferred tax liabilities	(396.6)	96.4	—	—	(19.6)	0.4	(319.4)
Deferred tax, net	646.4	148.6	17.4	—	46.1	5.4	863.9

TOTAL (252.2) 17.4 195.4

a) Current income tax

Income tax paid is presented net of tax credits utilized. Tax credits allocated to tax payments during the current year or to tax to be paid in the coming year are presented under “Other”.

b) Deferred tax Changes by type

	At 01/01/24 (Expense)/ Income for the period			Equity	Scope & exch. rates	At 31/12/24
Temporary differences:	1,252.9		214.5	(10.9)	(335.8)	1,120.7
• pensions and similar benefits	501.4		(37.3)	(23.2)	19.9	460.8
• intangible assets	(49.9)		133.5	—	(391.0)	(307.4)
• provisions on contract	208.8		18.8	—	(6.1)	221.5
• other	592.6		99.5	12.3	41.4	745.8
Tax loss carry-forwards	627.4		27.6	—	16.5	671.5
Total before depreciation	1,880.3		242.1	(10.9)	(319.3)	1,792.2
Depreciation	(1,016.4)		(47.0)	(20.0)	23.0	(1,060.4)
Total net deferred tax assets	863.9		195.1	(30.9)	(296.3)	731.8
	At 01/01/23	(Expense)/ Income for the period		Equity	Scope & exch. rates		At 31/12/23
Temporary differences:	949.8	148.9		48.4	105.8		1,252.9
• pensions and similar benefits	399.6	25.9		65.5	10.4		501.4
• intangible assets	(200.5)	123.3		—	27.3		(49.9)
• provisions on contract	247.7	(11.8)		—	(27.1)		208.8
• other	503.0	11.5		(17.1)	95.2		592.6
Tax loss carry-forwards	533.2	74.4		—	19.8		627.4
Total before depreciation	1,483.0	223.3		48.4	125.6		1,880.3
Depreciation	(836.6)	(74.7)		(31.0)	(74.1)		(1,016.4)
Total net deferred tax assets	646.4	148.6		17.4	51.5		863.9

Tax loss carry-forwards

	At 31/12/24
2025	1.3
2026-2029	0.2
Beyond 2029	6.6
Not time limited	663.4
Total	671.5
O/w, depreciated	(624.9)
Net deferred tax asset	46.6

Total tax loss carry-forwards represent a potential tax saving of €671.5 million at December 31, 2024 (€627.4 million at December 31, 2023). The corresponding expiry dates are as follows:

As described in Note 13-j, only deferred tax assets related to tax losses which the Group expects to recover are recognized on the balance sheet. In particular, the Group takes into account any loss carry-forward limitations.

Note 8. Equity and earnings per share 8.1 Equity

a) Share capital

At December 31, 2024, the share capital of the Thales parent company amounted to €617,825,739 and comprised 205,941,913 shares with a par value of €3. At December 31, 2023, it amounted to €630,630,420 and comprised 210,210,140 shares with a par value of €3.

b) Treasury shares

Thales parent company held 628,731 of its own shares at December 31, 2024. They were accounted for as a deduction from equity for an amount of €(92.5) million.

In accordance with the authorizations granted to the Board of Directors by the Annual General Meeting, the Company carried out the following transactions in 2023 and 2024:

	2024	2023
Treasury shares at opening	3,541,786	3,277,303
Purchases as part of a liquidity agreement	603,565	591,432
Disposals as part of a liquidity agreement	(564,071)	(621,129)
Transfer to employees as part of the employee share purchase plan	(452,348)	—
Delivery of free shares	(352,731)	(218,186)
Market purchases ^(a)	2,120,757	3,713,535
Cancelled shares	(4,268,227)	(3,201,169)
Treasury shares at closing	628,731	3,541,786

(a) Including 1,245,757 shares in 2024 and 3,458,535 shares in 2023 as part of the share buyback program announced on 3 March 2022.

At December 31, 2024 and 2023, as part of the liquidity agreement managed by Kepler Cheuvreux, the following numbers of shares were held in the liquidity account:

	2024	2023
Number of shares	83,739	44,245
Cash (in € million)	22.3	27.7

c) Translation adjustments

Translation adjustments result from the translation of financial statements of companies whose functional currency is not the euro, offset as applicable by the impact of derivative instruments denominated in foreign currencies to hedge net investments in foreign operations.

Translation adjustments are recorded in equity as “other comprehensive income”, and are subsequently reclassified to income on the disposal date of related investments. They break down as follows:

	2024	2023
Translation adjustments at 1 January	(369.8)	(258.3)
Changes in value	246.0	(115.7)
Reclassified to profit and loss	14.5	5.0
Gross change	260.5	(110.7)
Deferred tax	—	—
Scope and other	0.8	(0.8)
Translation adjustments at 31 December	(108.5)	(369.8)

The main exchange rates used to translate financial statements of entities with a functional currency different from the euro are as follows:

(in euros) Australian dollar	31 December 2024	31 Dece	mber 2023	31 December 2022
	Closing rate Average rate 1.6772 1.6438	Closing rate Average rate		Closing rate Average rate
		1.6263 1.6347		1.5693 1.5154
Pound sterling	0.8292 0.8450	0.8691 0.8688		0.8869 0.8548
U.S. dollar	1.0389 1.0808	1.1050 1.0829		1.0666 1.0500

In addition, the average rate of Argentina's currency has been specifically determined for 2023 to take into account the devaluation of the currency occurred at the very end of the year.

d) Reserves for cash flow hedge

The Group uses derivatives to hedge against changes in the value of future cash flows. In the consolidated financial statements, the effective portion of changes in fair value of these derivatives is recognized directly in equity, until such time as the hedged flows affect profit and loss.

	2024	2023
Cash flow hedge at 1 January	(32.4)	(124.6)
Changes in value of derivatives	(73.5)	83.4
Reclassified to operating (income)/expense	(39.6)	38.0
Reclassified to income tax (benefit)/expense	8.2	(7.4)
Changes in scope and exchange rates	23.8	(21.8)
Cash flow hedge at 31 December	(113.5)	(32.4)

A negative balance at closing means that the exchange rates and interest rates of the derivative documented as hedges are generally less favorable than the rates prevailing at the closing date.

e) Parent company dividend distribution

The per-share dividend amounted to €2.94 in 2022 and €3.40 in 2023.

On 3 March 2025, the Board of Directors decided to propose to shareholders, who will be convened to a General Meeting on 16 May 2025, the payment of a dividend of [€3.70] per share for the year 2024.

If approved, the dividend will be detached on May 20, 2025 and paid on May 22, 2025. The dividend will be paid fully in cash and will amount to [€2.85] per share, after deducting the interim dividend of €0.85 per share paid in December 2024.

Dividends paid in 2023 and 2024 are described below:

Year	Approved by	Description	Dividend per share (in euro)	Payment date	Payment method	Total (€ million)
2024	Board of Directors on 8 October 2024	2024 interim dividend	€0.85	Dec. 2024	cash	174.2
	General Meeting on 15 May 2024	Balance for 2023	€2.60	May 2024	cash	534.2
	Total dividends paid in 2024					708.4
2023	Board of Directors on 28 September 2023	2023 interim dividend	€0.80	Dec. 2023	cash	165.7
	General Meeting on 10 May 2023	Balance for 2022	€2.24	May 2023	cash	468.0
	Total dividends paid in 2023					633.7
2022	Board of Directors on 29 September 2022	2022 interim dividend	€0.70	Dec. 2022	cash	147.2

f) Non-controlling interests

This item principally includes Leonardo’s interest in the Thales Alenia Space subgroup (33%), and Siemens’s and Philips Medical Systems International’s interest in Trixell SAS (49%).

The individual contributions of these minority shareholders to the Group’s key financial indicators are not material.

The cash of these two companies is unrestricted and is exclusively pooled with Thales’ Corporate Treasury Department.

8.2 Earnings per share

		2024	2023
Numerator (in € million): Net income, Group share	(A)	1,419.5	1,023.4
Of which: net income relating to continued operations, Group share		1,007.4	949.1
Of which: net income relating to discontinued operations, Group share		412.1	74.3
Denominator (in thousands): Average number of shares outstanding	(B)	205,523	208,507
Free shares and units plans ^(a)		498	656
Diluted average number of shares outstanding	(C)	206,021	209,163
Net earnings per share (in euros)	(A)/(B)	6.91	4.91
Of which: basic earnings relating to continued operations, per share		4.90	4.55
Of which: basic earnings relating to discontinued operations, per share		2.01	0.36
Diluted net earnings per share (in euros)	(A)/(C)	6.89	4.89
Of which: diluted earnings relating to continued operations, per share		4.89	4.54
Of which: diluted earnings relating to discontinued operations, per share		2.00	0.36
Average share price		€148.29	€132.48

(a) Shares/units that are subject to internal performance conditions are only taken into account when the performance conditions are achieved.

Note 9. Employee benefits

9.1 Consolidated headcount

Consolidated headcount includes all employees of fully consolidated companies. It does not include employees of equity affiliates. At end- 2024, Thales’ headcount stood at 83,206 (81,060 in 2023). Three quarters of the headcount comprises employees with grades equivalent to engineer, specialist or manager.

9.2 Personnel expenses

In 2024, wages, salaries and payroll taxes amounted to €9,247.1 million (€8,327.9 million in 2023).

9.3 Provisions for pensions and other employee benefits

The Group grants to its employees post-employment benefits (pensions, end-of-career severance, medical coverage, etc.) and other long-term benefits (long-service and jubilee awards, etc.).

a) Description of the plans

The Group’s existing plans are either defined-contribution plans or defined-benefit plans.

Defined-contribution plans

In certain countries, the Group pays contributions based on salaries to state organizations overseeing basic pension schemes (e.g., Sécurité Sociale or the compulsory supplementary scheme AGIRCARRCO in France). Beyond these basic pension schemes, Thales also contributes to other defined-contribution plans (e.g., in the Netherlands and the United Kingdom since 2002). These plans do not impose any obligations on the Group other than the payment of contributions: there is no related benefit obligation and contributions are expensed in the period they are incurred.

Defined-benefit plans

Defined-benefit plans relate to different types of benefits:

• pensions and end-of-career indemnities (legal or contractual), and other long-term benefits (jubilee awards, etc.), particularly in France. In general, these commitments are not covered by any assets;

• supplementary pension schemes, mainly in the United Kingdom, in Germany and in Switzerland. These schemes provide a pension based on the beneficiary’s average salary, indexed to inflation. The present value of the Group’s obligations and the fair value of plan assets are measured independently. A provision is recognized if the value of the assets is insufficient to cover the obligations.

At the end of 2023, Thales entered into an agreement to insure the full amount of obligations under the Thales UK Pension Scheme. Under this agreement, Thales arranged insurance coverage with Rothesay for its gross pension obligations, valued at GBP 2.677 billion. In return, Thales transferred the corresponding plan assets, with a net cash outflow of GBP 850 million (€980.7 million).

In addition, Thales purchased from the UK pension fund GBP 165 million (note 6.4 -b) of plan assets with an average maturity of 5 years, which are now recorded under "non-current financial assets".

Since the buy-in, Thales has initiated the full transfer of these obligations ("buy-out") to the insurer, which will be completed by mid-2025 at the latest, once, in particular, the administrative files of the more than 15,000 participants have been processed. The terms and conditions of the buy-out have already been contractually agreed with Rothesay.

As part of this transaction, a non-current charge of GBP 349 million (€402.9 million) has been recorded in 2023 (note b), and a further charge of GBP 48.4 million (€57,3 million) has been recorded in

2024 in respect of administrative expenses incurred in the context of The guarantees granted to Thales UK Pension Scheme by Thales the ongoing disposal. parent company to cover the future obligations of the subsidiaries

concerned under the financing plans have become irrelevant, even if they will only be formally cancelled following the buy-out.

In addition, the annual contribution to the deficit (GBP 75 million per year) has been stopped, with effect from December 1, 2023.

b) Provisions recognized on the balance sheet

	2024	2023
Provision at opening	(1,552.5)	(1,907.7)
Current service cost (income from operations)	(97.5)	(92.8)
Past service cost and settlements (non recurring operating income)	(72.6)	(402.9)
Net interest cost	(48.1)	(70.8)
Pension fund management cost	(0.5)	(5.2)
Actuarial gains and losses on other long-term employee benefits	(2.7)	(1.8)
Finance costs on pensions and other long-term employee benefits	(51.3)	(77.8)
Total expense for the period	(221.4)	(573.5)
Actuarial gains and losses (other comprehensive income) ^(a)	65.8	(266.6)
Benefits and contributions	129.9	1,181.5
• of which, deficit payment in the United Kingdom	—	97.5
• of which, buy-in payment (Thales UK Pension Scheme)	12.5	980.7
• of which, other benefits and contributions	117.4	103.3
Translation adjustment	(0.9)	(7.9)
Changes in scope of consolidation and other	(10.2)	21.7
Provision at closing	(1,589.3)	(1,552.5)
Of which: • post-employment benefits	(1,364.7)	(1,338.4)
• other long-term benefits	(224.6)	(214.1)

(a) Mainly due to the change in actuarial rates, especially in the United Kingdom.

c) Changes in defined benefit obligations and plans assets

2024	UK	France	Other	Total
Obligation at 1^st January	(3,240.8)	(1,279.5)	(570.3)	(5,090.6)
Current service cost	—	(76.5)	(21.0)	(97.5)
Interest cost	(140.9)	(39.7)	(13.7)	(194.3)
Plan participant contributions	—	—	(5.6)	(5.6)
Amendments/settlements	(27.2)	(13.3)	(2.1)	(42.6)
Experience gains (losses)	98.3	(25.1)	2.9	76.1
Actuarial gains (losses)/financial assumptions	308.3	55.3	2.9	366.5
Actuarial gains (losses)/demographic assumptions	—	17.9	(0.1)	17.8
Actuarial gains (losses) on long-term benefits	—	(1.9)	(0.8)	(2.7)
Benefits paid by plan assets	179.1	3.4	21.0	203.5
Benefits paid by employer	0.7	92.3	26.5	119.5
Changes in scope, exchange rates and other	(147.7)	0.2	(22.1)	(169.6)
Obligation at 31 December	(2,970.2)	(1,266.9)	(582.4)	(4,819.5)
Plan assets at 1^st January	3,234.2	50.1	256.1	3,540.4
Expected return on plan assets	140.6	1.7	3.9	146.2
Employer’s contribution	6.2	(6.5)	10.7	10.4
Plan participant contributions	—	—	5.6	5.6
Amendments/settlements	(30.0)	—	—	(30.0)
Benefits paid by plans assets	(179.1)	(3.4)	(21.0)	(203.5)
Experience gains (losses)	(413.9)	3.2	13.5	(397.2)
Changes in scope, exchange rates and other	146.4	(0.4)	12.0	158.0
Plan assets at 31 December ^(a)	2,904.4	44.7	280.8	3,229.9
Asset ceiling at 31 December	—	—	0.3	0.3
PROVISIONS AT 31 DECEMBER	(65.8)	(1,222.2)	(301.3)	(1,589.3)

(a) Pension plan assets in the UK are now managed by Rothesay.

2023	UK	France	Other	Total
Obligation at 1st January	(2,914.9)	(1,198.2)	(523.7)	(4,636.8)
Current service cost	(8.0)	(66.5)	(18.3)	(92.8)
Interest cost	(140.0)	(43.8)	(15.0)	(198.8)
Plan participant contributions	(5.8)	—	(4.7)	(10.5)
Amendments/settlements	(133.9)	—	(1.0)	(134.9)
Experience gains (losses)	(13.1)	(25.2)	3.0	(35.3)
Actuarial gains (losses)/financial assumptions	(129.5)	(51.9)	(50.7)	(232.1)
Actuarial gains (losses)/demographic assumptions	0.7	3.2	(1.7)	2.2
Actuarial gains (losses) on long-term benefits	—	(0.8)	(1.0)	(1.8)
Benefits paid by plan assets	163.0	3.3	19.4	185.7
Benefits paid by employer	0.7	84.8	24.0	109.5
Changes in scope, exchange rates and other	(60.0)	15.6	(0.6)	(45.0)
Obligation at 31 December	(3,240.8)	(1,279.5)	(570.3)	(5,090.6)
Plan assets at 1^st January	2,457.5	85.6	240.7	2,783.8
Expected return on plan assets	120.4	3.2	4.4	128.0
Employer’s contribution	1,097.3	(33.7)	8.4	1,072.0
Plan participant contributions	5.8	—	4.7	10.5
Amendments/settlements	(268.0)	—	—	(268.0)
Benefits paid by plans assets	(163.0)	(3.3)	(19.4)	(185.7)
Experience gains (losses)	(61.5)	(0.8)	7.3	(55.0)
Changes in scope, exchange rates and other	45.7	(0.9)	10.0	54.8
Plan assets at 31 December	3,234.2	50.1	256.1	3,540.4
Asset ceiling at 1^st January	—	—	(2.3)	(2.3)
PROVISIONS AT 31 DECEMBER	(6.6)	(1,229.4)	(316.5)	(1,552.5)

d) Actuarial assumptions used

The actuarial assumptions used are determined according to the economic environment and specific criteria of each country and each system. The most sensitive assumptions are as follows:

2024	UK	France
Inflation rate	3.07%	2.03%
Discount rate	5.36%	3.39%

2023	UK	France
Inflation rate	2.99%	2.22%
Discount rate	4.40%	3.12%

For each country, the discount rates are obtained by reference to the Iboxx Corporate AA index, which reflects the rate of return of very highquality corporate bonds, with maturity dates equivalent to the duration of the plans being measured, and in the same currency.

The sensitivity of the net obligation to a change in the discount rate at December 31, 2024, excluding the United Kingdom, is as follows:

Sensitivity in basis points	+25	+50	+100	-25	-50	-100
Decrease (increase) in provision (in € millions)	51.3	98.0	183.9	(49.7)	(104.0)	(220.5)

9.4 Share-based payment

At December 31, 2024, the following shares were outstanding: All of these plans are submitted to internal performance conditions

• 1,076,212 free shares; over the three financing years following their grant date. The features of these plans are described in Chapter 6.2 of the 2024

• 326,350 phantom shares, payable in cash at the end of a four- Registration Document. year vesting period.

a) Allotment of free shares

Date of Board decision	Vesting period Share price at grant date			Number of free shares at 31/12/23 ^(a)			Shares allotted in 2024		Shares cancelled in 2024		Shares delivered in 2024	Number of free shares at 31/12/24
25/06/2024	25/06/2024 to 25/06/2028 €158.10			—			243,268		(326)		—	242,942
20/07/2023	20/07/2023 to 20/07/2027 €138.55			285,700			—		(1,670)		—	284,030
30/06/2022	30/06/2022 to 30/06/2026 €116.00			263,780			—		(1,740)		—	262,040
01/07/2021	01/07/2021 to 01/07/2025 €86.04			289,320			—		(2,120)		—	287,200
24/11/2020	24/11/2020 to 24/11/2024 €79.60			351,715			—		(1,875)		(349,840)	—
												1,076,212
(a) After adjustment. b) Allotment of phantom shares indexed to the value of Thales shares
Date of Board decision		Vesting period Number of phantom shares at 31/12/23 ^(a)			Phantom shares Phantom shares alloted in 2024 cancelled in 2024					Phantom shares delivered in 2024		Number of phantom shares at 31/12/24
25/06/2024		25/06/2024 to 25/06/2028	—			72,587		(157)		—		72,430
20/07/2023		20/07/2023 to 20/07/2027	87,085			—		(2,745)		—		84,340
30/06/2022		30/06/2022 to 30/06/2026	80,315			—		(2,580)		(195)		77,540
01/07/2021		01/07/2021 to 01/07/2025	96,220			—		(4,180)		—		92,040
24/11/2020		24/11/2020 to 24/11/2024	190,880			—		(9,940)		(180,940)		—
												326,350

(a) After adjustment..

c) Employee share purchase plan

Following the decision of the Board of Directors on 4 April 2024, the Group implemented a Thales share purchase plan reserved to its employees with a discount compared to the average market price plus an employer contribution.

The subscription price of €119.69, set on 28 October 2024, corresponds to the average of the opening price of Thales shares on Euronext Paris from 30 September to 25 October 2024, discounted by 20%. The employees also received an employer matching contribution corresponding to 50% of their subscription, up to a maximum of €500.

This plan is part of the Group savings plan, subject to a five-year lockup period of the investment, except for the United Kingdom where the share offering is implemented in accordance with the Share Incentive Plan (“SIP”).

Thus, in 2024, 316,052 shares were subscribed by employees and 136,296 bonus shares were received. The delivery of shares to UK based employees has been finalized in early 2025.

In the consolidated financial statements, the cost of this plan is € -28.8 million before social contributions.

d) Expenses related to share-based payments

In the consolidated financial statements, the benefit granted to beneficiaries of the above-mentioned plans is recognized as an operating expense. These amounts are presented below:

Plans	Residual fair value at the end of 2024	2024 expense	2023 expense
Free shares	61.9	(31.2)	(24.4)
Phantom shares and other schemes ^(a)	19.7	(18.2)	(19.2)
Employee share purchase plan	—	(28.8)	—
Social contributions related to the plans	16.2	(15.4)	(9.7)
TOTAL	97.8	(93.6)	(53.3)
Of which, offsetting entries: • Shareholders’ equity		60.0	24.4
• Current operating liabilities		33.6	28.9

(a) This line includes the expense relating to the long-term incentive plan (LTIP) of the Chairman and CEO, the conditions of which are described in the relevant years Registration or Universal Registration documents.

9.5 Compensation of Directors and senior corporate officers

Expenses recognized in respect of compensation, benefits and social security contributions attributed to Directors and members of the Executive Committee are as follows:

	2024	2023
Short-term benefits:	7.3	7.5
• Fixed compensation	7.3	7.5
• Variable compensation	7.1	7.3
• Employer social security contributions	7.0	5.8
• Board attendance fees	1.1	0.6
Other benefits (including social contributions): • Post-employment benefits	4.5	3.4
• Share-based payments	7.8	8.0

In the event of a member joining or leaving the Executive Committee during the year, the remuneration taken into account in the above table is that corresponding to the period of presence.

At December 31, 2024, the share of directors in net Group pension obligations (Note 9.3) amounted to €10.7 million.

Note 10. Current operating assets and liabilities

Current operating assets and liabilities include working capital (WCR) components and reserves for contingencies, as defined in Note 13-d.

The changes in these items are presented below:

Change for the period	01/01/23	Changes in WCR and reserves	Scope, exch. rate and reclass.	31/12/23	Changes in WCR and reserves	Scope, exch. rate and reclass.	31/12/24
Inventories, work in progress and set-up costs	3,672.3	670.1	(91.6)	4,250.8	602.4	82.3	4,935.5
Contract assets	2,410.5	456.9	29.6	2,897.0	312.9	32.8	3,242.7
Advance to suppliers	641.9	148.6	(4.1)	786.4	170.2	(60.9)	895.7
Accounts, notes and other receivables	5,810.1	510.1	(51.1)	6,269.1	918.9	(41.8)	7,146.2
Current derivatives – assets	172.6	27.9	(67.1)	133.4	1.4	0.3	135.1
Contract liabilities	(8,313.6)	(1,265.5)	(209.5)	(9,788.6)	(1,712.5)	(40.0)	(11,541.1)
Reserves for contingencies	(1,752.0)	8.5	16.8	(1,726.7)	22.2	(260.2)	(1,964.7)
Accounts, notes and other payables	(6,918.7)	(713.7)	(11.7)	(7,644.1)	(360.0)	(328.6)	(8,332.7)
Current derivatives – liabilities	(328.2)		140.4	(187.8)	—	(164.9)	(352.7)
WCR and reserves, net	(4,605.1)	(157.1)	(248.3)	(5,010.5)	(44.5)	(781.0)	(5,836.0)
Restructuring provisions		(15.6)			18.4
INCREASE (DECREASE) IN WCR AND RESERVES		(172.7)			(26.1)

10.1 Inventories, work in progress, and set-up costs

	31/12/24	31/12/23
Goods	59.4	62.7
Raw materials	1,540.8	1,318.8
Semi-finished and finished goods	2,464.2	2,164.3
Work in progress	1,350.3	1,175.1
Gross value	5,414.7	4,720.9
Depreciation	(667.4)	(723.9)
Inventories and work in progress, net	4,747.3	3,997.0
Gross	1,057.9	1,017.0
Depreciation	(869.7)	(763.2)
Set-up costs, net	188.2	253.8
TOTAL	4,935.5	4,250.8

10.2 Contract assets and liabilities

	31/12/24	31/12/23
Unbilled receivables, gross	11,054.9	9,613.7
Unbilled receivables, depreciation	(15.6)	(15.8)
Advances received from customers	(7,796.6)	(6,700.9)
Contract assets	3,242.7	2,897.0
Advances received from customers	(16,981.2)	(14,944.5)
Unbilled receivables	8,658.5	8,061.1
Deferred income	(3,218.4)	(2,905.2)
Contract liabilities	(11,541.1)	(9,788.6)

For a given contract, a contract asset (liability) represents the recognized, and decreases when invoices are issued to the accumulated revenue not yet invoiced, less advances received from customers or advance payments are received. customers. This amount increases as and when revenue is

10.3 Reserves for contingencies

	01/01/24	Utilisation	Additions	Reversal (surplus)	Exch. Rate and other	31/12/24
Restructuring	40.7	(24.3)	47.6	(4.9)	1.2	60.3
Technical and other litigation	274.5	(25.4)	51.2	(53.9)	(3.5)	242.9
Guarantees	251.0	(74.6)	75.5	(5.7)	—	246.2
Losses at completion	431.3	(154.0)	188.8	(33.4)	3.7	436.4
Provisions on contracts	466.0	(140.3)	108.1	(24.2)	50.1	459.7
Other ^(a)	263.2	(56.8)	121.2	(17.1)	208.7	519.2
TOTAL	1,726.7	(475.4)	592.4	(139.2)	260.2	1,964.7
	01/01/23	Utilisation	Additions	Reversal (surplus)	Exch. Rate and other		31/12/23
Restructuring	50.0	(32.0)	24.7	(8.3)	6.3		40.7
Technical and other litigation	274.8	(31.3)	59.6	(19.9)	(8.7)		274.5
Guarantees	299.2	(100.7)	67.3	(13.4)	(1.4)		251.0
Losses at completion	433.0	(143.5)	160.5	(18.3)	(0.4)		431.3
Provisions on contracts	435.2	(51.9)	103.6	(10.1)	(10.8)		466.0
Other ^(a)	259.8	(53.1)	68.7	(10.4)	(1.8)		263.2
TOTAL	1,752.0	(412.5)	484.4	(80.4)	(16.8)		1,726.7

(a) This line includes technical provisions of insurance companies, provisions for labor-related risks, vendor warranties, environmental guarantees and other.

The breakdown of restructuring costs is as follows:

	2024	2023
Additions for the period	(47.6)	(24.7)
Utilisation for the period	24.3	32.0
Reversals for the period	4.9	8.3
Net	(18.4)	15.6
Expenses for the period	(99.9)	(107.0)
Restructuring costs	(118.3)	(91.4)

10.4 Maturity of current receivables and payables

The amounts presented in the balance sheet for this item break down as follows:

	Total	< 1 year	> 1 year
Accounts receivables gross	4,549.4	4,440.1	109.3
Accounts receivables depreciation	(131.0)	(91.4)	(39.6)
Accounts receivables, net	4,418.4	4,348.7	69.7
Tax receivables (excluding income tax)	1,826.5	1,688.1	138.4
Other receivables, gross	908.6	790.1	118.5
Other receivables, depreciation	(7.3)	(7.3)	—
Other receivables, net	2,727.8	2,470.9	256.9
Account, notes and other receivables	7,146.2	6,819.6	326.6
Accounts and notes payable	3,008.4	2,989.7	18.7
Accrued holiday pay and payroll taxes	2,660.2	2,573.3	86.9
Tax payables (excluding income tax)	1,787.5	1,787.5	—
Other creditors and accrued liabilities	876.6	759.8	116.8
Accounts notes and other payables	8,332.7	8,110.3	222.4

31/12/24 31/12/23

The changes in provisions on accounts and notes receivable break down as follows:

		01/01/24	Additions/reversal	Exchange rate and scope	31/12/24
Provisions on accounts and notes receivable		(137.9)	(6.4)	13.3	(131.0)

The Group may assign trade receivables, mainly from the French State, and commercial paper. At December 31, 2024, outstanding derecognized receivables amounted to €93.6 million (€145.4 million at December 31, 2023). Since these assignments are without recourse in case of debtor default, the receivables in question are subject to “de-recognition” of the asset.

10.5 Commitments linked to commercial contracts

The Group has implemented a reverse factoring program primarily aimed at securing its strategic supplies and supporting its suppliers by providing them with a pre-financing solution. The outstanding amount of supplier invoices included in the reverse factoring program as of December 31, 2024, stands at €35 million (classified under the item 'Suppliers and other current liabilities' on the balance sheet).

The Group’s contractual commitments towards its counterparties (mainly its customers) can be subject to three types of guarantees or warranties:

•

a) Bank guarantees

• Bid bonds: In the ordinary course of its activities, the Group regularly responds to invitations to tender. When requested by the customer, bid bonds are delivered in order to demonstrate the definitive nature of the bid and to indemnify the customer if the Group fails to meet its commitments. At December 31, 2024, bid bonds issued amounted to €52.6 million (€17.9 million at December 31, 2023).

• Performance bonds: From the signature of a contract up until its ^• completion, the Group may also issue performance bonds for its customers, with a bank acting as an intermediary, in order to cover the payment of damages to the customer in the event that the Group does not meet its contractual commitments. At December 31, 2024, performance bonds amounted to €1,220.4 million (€1,322.4 million at December 31, 2023). Technical, operational and financial costs incurred by the Group in order to meet its obligations are valued on a contract-by-

contract basis, and are included in the cost to completion of the contract. Where this is not the case, a provision is set aside in the consolidated financial statements for any potential risk, estimated on a contract-by-contract basis.

Advance payment bonds: In order to finance contract execution, the Group may receive advance payments from its customers, in accordance with contractual terms, which are recognized in liabilities in the balance sheet. In order to guarantee reimbursement of these advance payments if the contractual obligations are not met, the Group may deliver, at the customer’s request, an advance payment bond. At December 31, 2024, advance payment bonds amounted to €3,496.6 million (€3,126.9 million at December 31, 2023).

Warranty retention bonds: The Group evaluates and sets aside provisions for warranty costs in order to guarantee the conformity of goods sold to the customer during the contractual warranty period. In many cases, the provisional withholding of payment contractually applying during this period can be replaced by a warranty retention bond using a bank as intermediary. At December 31, 2024, warranty retention bonds amount to €69.1 million (€83.3 million at December 31, 2023).

The maturity dates of these commitments are:

	< 1 year	1 to 5 years	> 5 years	31/12/24	31/12/23
Bid bonds	32.7	9.2	10.7	52.6	17.9
Performance bonds	336.5	558.1	325.8	1,220.4	1,322.4
Advance payment bonds	941.1	1,580.9	974.6	3,496.6	3,126.9
Warranty retention bonds	13.1	23.7	32.3	69.1	83.3
Other bank bonds	82.7	176.6	475.4	734.7	479.4
TOTAL	1,406.1	2,348.5	1,818.8	5,573.4	5,029.9

Guarantees are issued by Thales SA (parent company) in favor of customers aimed at guaranteeing the obligations of its subsidiaries mainly under commercial contracts. These internal guarantees, without bank intermediation, as reported in paragraph 19.1 of the accounts of Thales SA (parent company), are therefore not included in the consolidated data.

b) Offsetting commitments

The associated risks are described in section 3.1.3.a of the 2024 Universal Registration Document.

Note 11. Government, judicial or arbitration claims

The awarding of major contracts, particularly within the defence sector, may be subject to legal or regulatory offsetting of the execution of local obligations, which can take the form of direct offsetting, semi-direct offsetting or indirect offsetting.

As of the date of the consolidated financial statements, the judicial investigation initiated in 2022 concerning the business relations undertaken by Gemalto (now Thales Communication et Sécurité Numériques) prior to its acquisition by Thales in 2019 is still ongoing.

In June 2024, several searches took place at various sites in France, the Netherlands, and Spain, as part of two preliminary investigations initiated by the Parquet National Financier (PNF).

In November 2024, the Parquet National Financier (PNF) in France and the Serious Fraud Office (SFO) in the United Kingdom initiated an investigation in relation to four Thales entities located in France and the UK, regarding the performance of a contract in Asia.

Note 12. Subsequent events

The Group is not aware of any significant events subsequent to the closing date.

Thales denies the allegations brought to its knowledge and is fully cooperating with the judicial authorities. However, the outcome of these proceedings is not known at this time, including any potential financial consequences that may result from them.

At the date hereof, there is no other government, judicial or arbitration claims, pending or threatened, which could have any significant effect on the financial position or profitability of the Company and/or the Group.

Note 13. Accounting policies

a) Presentation of the financial statements

Consolidated profit and loss account

Expenses in the income statement are presented analytically by function.

Income from operations is equal to income of operating activities before taking into account:

• gains and losses on disposals of property, plant and equipment and intangible assets, businesses or investments;

• the impact of changes in scope on consolidated net income before tax (Note 13-b);

• the impact of the amendment, curtailment or settlement of pension plans and other long-term benefits;

• other operating items resulting from unusual events, with a material impact on the financial statements, including impairment of assets.

Consolidated balance sheet

A significant portion of the Group’s activities in its different business segments have long-term operating cycles. Accordingly, assets (liabilities) that are usually realized (settled) within the entities’ operating cycles (inventory, accounts receivable and payable, advance payments, reserves, etc.) are classified in the consolidated balance sheet as current assets and liabilities, with no distinction between the amounts due within one year and those due after one year.

Consolidated statement of cash flows

The statement of cash flows provides an analysis of the change in cash and cash equivalents, as presented in the balance sheet and defined in Note 13-i. The statement of cash flows is prepared using the indirect method based on consolidated net income and is broken down into three categories:

• net cash flow from operating activities, including interest. Income tax payments are included in this caption, except when directly associated to investing or financing activities;

• net cash flow used in investing activities, including net operating investments (acquisition and disposal of property, plant and equipment and intangible assets, capitalization of development costs) and net financial investments;

• net cash flow used in financing activities including dividends paid, capital subscriptions, the purchase/sale of treasury shares, the issuance and repayment of debt, and changes in bank overdrafts, etc.

The Group also discloses the changes in its net cash (debt), which is a non-GAAP measure. Net cash (debt) is the ,difference between the sum of “cash and cash equivalents” and “current financial assets” items and short and long-term borrowings, after deduction of interest rate derivatives.

Changes in net cash (debt), as presented in Note 6.3, notably reflect free operating cash flow, defined as net cash flow from operating activities, less capital expenditures, less deficit payments on pensions in the United Kingdom, including the cash-out to Rothesay as part of the insurance coverage for the Thales UK Pension Scheme.

Segment information, EBIT and adjusted net income

The business segments presented by the Group are as follows:

• the Aerospace segment combines the “Avionics” and “Space” Global Business Units. They develop on-board systems and services for private sector customers (aircraft manufacturers, airlines, satellite operators, etc.) and for government/defence customers (national governments, space agencies and other semipublic organizations);

• the Defence & Security segment combines the “Secure Communications and Information Systems”, “Land and Air Systems” and “Defence Mission Systems” Global Business Units. They develop equipment, systems and services for armed forces and for the protection of networks and infrastructure, mainly for a government/defence customer base;

• the Cyber & Digital sector includes cybersecurity and digital identity activities for businesses and administrations. They develop global products focused on data security and premium services, so as physical identities and their digital counterparts for payment, mobile network access, and government-issued identities (passports, ID cards, driver's licenses, etc,...).

The Transportation business segment has been considered as a discontinued operation as from the date of the signature of the put option agreement with Hitachi Rail. Consequently, financial data of this segment are excluded from segment information in Note 2.

In order to monitor and compare its operating and financial performances, the Group presents the following key indicators: Adjusted EBIT corresponds to income from operations, plus the share of net income or loss of equity affiliates, less amortization of acquired assets (PPA) and expenses recorded in the income from operations that are directly related to business combinations.

Adjusted net income, as presented in the Group’s management report, is the net income, less the following items, net of the corresponding tax effects:

• amortization of acquired assets (PPA);

• expenses recorded in “income from operations” or in “financial results” which are directly related to business combinations;

• impairment of assets ; • gains and losses on disposal of assets, changes in scope of consolidation and others;

• changes in the fair value of derivative instruments, recognized in “Other financial income and expenses”;

• actuarial gains and losses on long-term employee benefits, included in “Finance costs on pensions and other employee benefits”.

Earnings per share

Basic earnings per share are calculated by dividing the net income attributable to the shareholders of the parent company by the pro rata temporis weighted average number of shares outstanding during the period, excluding treasury shares.

Diluted earnings per share only take into account instruments with a dilutive effect on earnings per share. The dilutive effect of free shares and unit allotments is calculated using the treasury stock method, taking into account the average share price over the relevant period.

Off-balance sheet commitments

Disclosures regarding off-balance sheet commitments are presented in the following notes:

• Note 9.3-a: funding obligations in respect of pensions;

• Note 10.5: commitments linked to commercial contracts.

Related parties

The Group has identified the following related parties: shareholders of Thales SA (parent company), notably the French State and Dassault Aviation, companies controlled by these shareholders, companies under joint control or significant influence, Directors and Senior Corporate Officers.

Section 6.2.3.3 of the 2024 Universal Registration Document describes the main provisions concerning the shareholders agreement governing relations between the French State (“Public Sector”) and Dassault Aviation (“Industrial Partner”) within Thales, the convention on the protection of national strategic interests and the specific convention binding the State and Thales.

Information related to transactions with related parties is presented in the following notes:

• sales with the French State (mainly with the Direction Générale de l’Armement, the French defence procurement agency) in Note

6.6-b;

• transactions with equity affiliates in Note 5.3.

Transactions with these related parties take place within a recurring operating context. Transactions with other related parties are not material.

Expenses recognized in respect of compensation, benefits and social security contributions attributable to Directors and members of the Executive Committee are presented in Note 9.5.

b) Scope of consolidation and changes in scope

Scope of consolidation

The financial statements of material subsidiaries directly or indirectly controlled by Thales are fully consolidated. The financial statements of material subsidiaries jointly controlled by Thales (joint ventures) or in which the Group has significant influence (associates) are accounted for under the equity method.

The main consolidated companies are listed in Note 15.

The full list of affiliates outside of France is available on the Group’s website (https://www.thalesgroup.com/en/global/ corporate-responsibility/key-documents).

Business combinations

Business combinations are accounted for under the acquisition method as described in IFRS 3. Under this method, the Group recognizes identifiable assets acquired and liabilities assumed at fair value on their acquisition date. It also recognizes non-controlling interests in an acquiree on their acquisition date.

When taking the control of an entity previously accounted under the equity method, the share previously held is revalued at fair value through profit or loss.

Contractually agreed earn-outs/price adjustments are estimated at the date of acquisition/ disposal of businesses and recorded under “Other financial liabilities” / “Other financial assets”.

Acquisition-related costs (valuation fees, consulting fees, etc.) are recognized under “other operating expenses” as incurred.

Negative goodwill is immediately recognized in “other operating income”. Positive goodwill related to controlled companies is recognized in balance sheet assets under intangible assets. Positive goodwill related to equity affiliates is recognized under “investments in joint ventures/associates”.

Goodwill is not amortized but is subject to impairment tests each year. Goodwill impairment is booked as an expense under “impairment” within “income from operations” and may not be reversed. Goodwill impairment related to equity affiliates is recognized in “share in net income of equity affiliates” and may be reversed.

c) Revenue

The Group’s principles of revenue recognition are the following:

Unbundling of multiple performance obligations within a single contract

Some contracts include the supply to the customer of distinct goods and services (for instance contracts combining Build and Run activities). In such situations, the contract must be segmented into several components (“performance obligations”), each component being accounted for separately, with its own revenue recognition method and margin rate.

The contract price is allocated to each performance obligation in proportion to the specific selling price of the underlying goods and services. This allocation should reflect the share of the price to which Thales expects to be entitled in exchange for the supply of these goods or services.

Options notified by the customer for the supply of distinct additional goods or services are generally accounted for separately from the initial contract.

Evaluation of revenue allocated to performance obligations

Variable considerations included in the selling price are taken into account only to the extent that it is highly probable that a significant reversal in the amount of revenue already recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Penalties for late delivery or for the improper execution of a performance obligation are recognized as a deduction from revenue.

If the financing component is deemed significant, the selling price is adjusted to reflect a “cash” selling price for the goods and services provided. A financing component exists when parties have agreed to set up a financing to the advantage of one of them, through contractual terms.

Revenue includes income from claims only when it is highly probable that such claims will be accepted by the customer.

Contractual amendments negotiated with customers are included in the selling price only when they become legally enforceable.

Revenue allocation among performance obligations

Some contracts related to Cybersecurity activities (sale of licenses and associated services) contain multiple performance obligations. The associated revenue is allocated to each distinct performance obligation based on their specific selling price.

These prices are generally determined based on the observable prices of products or services sold separately to similar customers under comparable circumstances (including any price discounts granted), or following the residual approach if no observable prices exist.

Recognition of revenue over time or at a point in time

Revenue associated with each performance obligation identified within a contract is recognized when the obligation is satisfied, i.e., when the control of the promised goods or services is transferred to the customer.

To demonstrate that the transfer of goods is progressive and recognize revenue over time, the following cumulative criteria are required:

• the goods sold have no alternative use and;

• the Group has an irrevocable right to payment (corresponding to costs incurred, plus a reasonable profit margin) for the work performed to date, in the event of termination for reasons other than Thales’ failure to perform as promised.

These criteria are fulfilled by the vast majority of Group contracts that include the design and delivery of complex goods.

Revenue from the sale of goods with an alternative use, and/or for which the Group has no enforceable right to payment in case of termination for convenience by the customer, is recognized when the goods are delivered to the customer. This essentially concerns equipment (mainly in civil avionics) and spare parts.

Revenue from service contracts is generally recognized over time, as the customer simultaneously receives and consumes the benefits of these services provided by Thales.

Percentage of completion method

The percentage of completion method generally used by the Group is expense-based: revenue is recognized based on costs incurred to date in relation to all the costs expected upon completion.

Margin recognition

Expected losses on contracts are fully recognized as soon as they are identified, pursuant to the provisions of IAS 37 on onerous contracts.

Order book

Order book (as disclosed in Note 2.1) corresponds to the amounts of the selling price allocated to the performance obligations not yet unsatisfied (or partially unsatisfied) at the closing date.

d) Operating assets and liabilities

Inventories and work in progress

Inventories and work in progress are carried at their production cost (determined using the FIFO or weighted-average cost method) and written down when their net sale value becomes lower than the production cost. Work in progress, semi-finished and finished goods are stated at direct cost of raw materials, production labor and subcontractor costs incurred during production, plus an appropriate portion of production overhead and any other costs that can be directly allocated to contracts.

When material, the cost of debt incurred during the construction period of a qualifying asset is incorporated in the value of this asset. If the funding is specific, the loan interest rate is used, otherwise the Group’s financing rate is used.

Set-up costs

These costs cover preparatory work, not directly financed by the customer but necessary for the execution of the contract. They do not contribute to the determination of the percentage of completion of the contract. They are capitalized and amortized as and when the revenue is recognized.

Contract assets and liabilities

The cumulated amount of revenue accounted for, less progress payments and accounts receivable (presented on a dedicated line of the balance sheet) is determined on a contract-by-contract basis. If this amount is positive, the balance is recognized under “contract assets” in the balance sheet. If it is negative, the balance is recognized under “contract liabilities”.

Customer receivables

A receivable is an unconditional right to payment by the customer.

Impairment losses are accounted for, based on a prospective assessment of the credit risk on the initiation of the receivable, and its deterioration over time. The changes in impairment are presented in Note 10.4.

The Group is authorized to assign trade receivables, mainly from the French State, and commercial paper. As these assignments, which are without recourse in case of default by the debtor, involve the transfer of substantially all corresponding risks and rewards (Thales holding the dilution risk), they are “derecognized.” Thales’ continued involvement (as this is defined by IFRS 7) in the transferred receivables corresponds to the keeping of the recovery mandate.

e) Research and development expenses

A significant share of research and development expenses is funded by customers and government agencies. Internally funded research and development expenses are charged to the profit and loss account as incurred, except for project development costs which meet the criteria of capitalization below:

• the product or process is clearly defined, and costs are separately identified and reliably measured;

• the technical feasibility of the product or project is clearly demonstrated, and the Group’s experience in this area is established;

• adequate resources are available to complete the project successfully;

• a potential market for the products exists or their usefulness, in case of internal use, is demonstrated;

• the company intends to produce and market, or use the new product or process, and can demonstrate its profitability. Profitability is assessed on the basis of prudent commercial assumptions in order to reflect contingencies inherent to the long cycles of the Group’s activities, in particular Aerospace. Minimum internal rates of return are required in the case of projects deemed risky.

Capitalized development costs mainly relate to the Group’s Aerospace and Security activities, for which the developed products are relatively generic and can be sold to a large number of potential customers. By contrast, development costs linked to Defence activities are for more specific and restricted markets with a limited number of players: the specific features of the products developed make it harder to share development work and therefore harder to capitalize the associated costs.

Development costs are then amortized over the useful life of the product. The method of amortization is generally determined by reference to expected future quantities over the period in which future economic benefits will be earned. If the method cannot be determined reliably, straight-line amortization is adopted. The period of amortization depends on the type of activity.

Assets are also subjected to impairment loss tests. The terms and assumptions taken into account to conduct these tests are described in Note 4.1. These impairment losses can be reversed. Impairment loss reversal criteria are identical to those retained when first capitalizing development costs on a new project.

The Group receives tax credits related to research carried out by its subsidiaries. These tax credits are considered as operating grants and are therefore included in income from operations, when their award is not dependent on the generation of taxable income. Otherwise, they are recognized as a deduction from income tax expense.

f) Restructuring costs

Provisions for restructuring costs are accounted for when restructuring programs have been agreed and approved by a competent body and have been announced before the balance sheet date, resulting in an obligating event of the Group to the third parties in question, as long as the Group does not expect compensation for these costs.

These costs primarily relate to severance payments, costs for notice periods not worked and other costs linked to the closure of facilities such as write-offs of fixed assets. These costs and the costs directly linked to restructuring measures (removal costs, training costs of transferred employees, etc.) are recognized under “restructuring costs” in the profit and loss account.

g) Property, plant and equipment and intangible assets

Intangible assets

The Group’s intangible assets mainly include:

• goodwill (Note 13-b);

• assets acquired in business combinations, primarily acquired technologies, customer relationships and the order book. These assets are recognized at fair value and amortized over their useful lives. The fair value of the assets is based on the market value. If no active market exists, the Group uses methods based on forecasts of the present value of the expected future operating cash flows (excess earnings method, royalty method, etc.);

• capitalized development costs (Note 13-e).

Intangible assets are submitted to impairment tests.

The amortization period of intangible assets recognized as part of a business combination (customer relationships, technologies, and trademarks) depends on the nature of the acquired business. It generally ranges from 4 to 22 years and is amortized on a straightline basis. No intangible assets have been identified as having an indefinite useful life.

Property, plant and equipment

Property, plant and equipment is stated at cost, net of any accumulated depreciation and accumulated impairment losses. Depreciation of property, plant and equipment is generally calculated on the basis of the following typical useful lives:

• 20 years for buildings;

• 1 to 10 years for technical facilities and industrial equipment and tooling;

• 5 to 10 years for other property, plant and equipment (vehicles, fixtures, etc.).

The depreciable amount takes into account the residual value of the asset. The various components of property, plant and equipment are recognized separately when their estimated useful lives or patterns of use, and thus the period over which they are depreciated or the depreciation methods applicable to them, are materially different.

Borrowing costs that are directly attributable to the acquisition or construction of an asset are capitalized as part of the cost of that asset.

h) Leases

Contracts defined as a lease according to IFRS 16 (that is to say contracts which give the lessee a right to control the use of an identified asset for a period of time in exchange for consideration) are accounted for in the balance sheet, with the exception of low value assets and contracts with a duration below 12 months (by simplification, as allowed by the standard). In the Group’s financial statements, lease contracts accounted for in the balance sheet are mainly real estate contracts (offices and production sites) and, to a lesser extent, service vehicles and some IT equipment.

Leases are accrued on the balance sheet at the date when the underlying asset is made available to the lessee. The lease liability is accrued against a right to use the rent asset, and is equal to the committed future lease payments discounted over the duration of the lease, as well as the exercise price of the options when it is reasonably certain that they will be exercised. The right-of-use asset is adjusted, if applicable, by the payments made in advance to the lessor, the initial direct costs incurred net of the incentives received by the lessor, and dismantling costs when an obligation is identified.

In the case of real estate contracts, the initial lease term retained for the lease liability calculation corresponds to the contractual term which is usually non-cancellable, the Group accepting most of the time to renounce to early termination options in order to benefit from favorable economic conditions. For these contracts, renewal options are generally not taken into account as the contractual terms are long and the date of exercise of these options is too far for the Group to be able to judge their exercise reasonably certain.

The Group may reassess this duration in the course of a contract duration in the case where a significant event occurs, such as a reorganization plan or expensive leasehold improvements. In such situations, the Group pays attention to the consistency between the amortization duration of the leasehold improvements and the term retained for the calculation of the lease liability.

Besides, when the end date of a contract is close, and in the absence of a moving project, the lease term is re-estimated in order to reflect the Group’s intention to renew the contract. In such a situation, as for open-end contracts (but cancellable anytime with termination notice by the lessee or the lessor) or for short-term contracts renewable without limitation by tacit agreement, the end date of the contract is estimated taking into account the applicable legal and contractual conditions, but also the particular context of each contract (fluidity of the local real estate market, relations with the lessor…) and economic conditions surrounding the lease (appreciation of the economic loss which represents, for the Group, the abandoning of improvements or constructions made on the leased asset…). This methodology is consistent with the IFRIC’s position taken on November 2019.

For other types of lease, there is usually no early termination or extension options, the lease term retained therefore corresponds to the non-cancellable period.

Future lease payments are discounted using the incremental borrowing rate of the lessee. The latest is calculated taking into account the financing arrangements of the Group, that is to say it is based on both the risk-free rate of the lessee and the margin applicable to Thales SA for financing with a maturity corresponding to the duration of the commitment.

The right-of-use asset is presented within the tangible assets (Note 4.2). It is amortized on a straight-line basis over the useful life of the underlying asset. The amortization charge for the right of use is included in EBIT.

The lease liability is presented in the balance sheet within the financial debt (Note 6.2). The interest charge is presented in the profit and loss account within the net interest income (Note 6.1).

Within the statement of cash flows:

• the interests paid are included within the net cash flow from operating activities;

• the reimbursement of the debt (“capital” portion of the rent paid) is presented in the financing cash flow on the line “repayment of debt”. Thus, it is not included in the cash flow from operating activities;

• new lease liabilities have no effect on the cash flow statement insofar as they are balanced with a right of use recognized in the assets of the balance sheet.

i) Financial assets, financial liabilities and derivatives

Financial assets

IFRS 9 introduces a single approach to classification and measurement of financial assets, based on the characteristics of the financial instruments and on the Group’s management intention. Thus:

• financial assets with expected cash flows that solely correspond to principal and interest payments are measured at amortized costs if managed only to collect these flows;

• in other cases, financial assets are measured at fair value through the income statement, except for equity investments not held for trading and whose changes in value affect optionally the Other Comprehensive Income (OCI).

These principles are reflected as follows on the assets presented in the Group’s balance sheet:

• Investments are measured at fair value. Fair value corresponds to the market price for shares quoted on a regulated market. For other shares, fair value is usually determined using valuation models provided by independent third parties, or by reference to the share in net equity held by the Group.

Changes in fair value are recognized either on the income statement or, subject to an irrevocable option, investment by investment, through OCI with no reclassification to the income statement. This latter option has been chosen by the Group for all non-consolidated investments at the end of 2021. Consequently, subsequent changes in fair value and gains (losses) on disposal will be directly accounted for through shareholders’ equity, with no impact on the income statement. Only dividends must remain accounted for through the financial result.

• Receivables and financial loans are recognized at amortized cost. They are subject to impairment if an expected loss or an impairment indicator is identified. This impairment, recognized in “other financial income (expense)”, may subsequently be reversed through profit and loss if the conditions so justify.

• Deposits that Thales intends to hold until maturity are recognized at amortized cost.

• Other financial assets (including mutual funds and equivalent products) are estimated at fair value through profit and loss.

Cash and cash equivalents

“Cash and cash equivalents” include cash at bank and in hand as well as cash equivalents (short-term and liquid investments that are easily converted into a known amount of cash and exposed to negligible risk of a change in value).

Financial liabilities

Borrowings and other financial liabilities are measured at amortized cost using the effective interest rate. Upon initial recognition, premiums, redemption and issuance costs are included in the calculation of the effective interest rate and are recognized in the profit and loss account on an actuarial basis over the life of the loan.

Derivatives

The Group uses financial instruments to manage and reduce its exposure to risks of changes in interest rates and foreign exchange rates.

Foreign exchange derivatives used to hedge commercial contracts, and eligible for hedge accounting are accounted for as follows:

• the effective portion of the change in fair value of the hedging instrument is recognized directly in equity until such time as the hedged flows affect profit and loss. The ineffective portion is recognized in profit and loss;

• the amount of the foreign currency denominated transaction is subsequently translated at the exchange rate prevailing at the date of inception of the hedge.

Changes in the fair value of premiums or discounts related to forward foreign currency contracts are recognized in “other financial income (expense)” as they are excluded from the hedging relationship.

The time value of foreign exchange options documented as hedges is considered as a cost of hedging: changes in fair value are accounted for through OCI, with reclassification to the financial result in line with the hedged item.

Concerning foreign exchange derivatives subscribed to hedge financial assets/liabilities, documented as fair value hedges, the swap point is spread over the duration of the financial asset/liability. Interest-rate derivatives are used either as fair value hedges or cash flow hedges:

• a fair value hedge is a hedge of the exposure to changes in the value of assets and liabilities;

• a cash flow hedge is a hedge of the exposure to changes in the value of future cash flows (unknown future interest flows payable on existing variable-rate borrowings or on highly probable future borrowing issues, for example).

In the case of fair value hedge relationships, particularly for the portion of fixed-rate bond debt swapped for a variable rate, the financial liabilities hedged by the interest-rate derivatives are remeasured to the extent of risk hedged. Changes in the value of hedged items are recognized in profit and loss for the period and are offset by symmetrical adjustments in interest-rate derivatives.

In the case of cash flow hedging relationships, the effective portion of changes in fair value of interest-rate derivatives shown in the balance sheet is recognized directly in equity until such time as the hedged flows affect profit and loss.

Fair value of financial instruments

IFRS 13 requires a hierarchy of valuation techniques for each financial asset and liability. The categories are defined as follows:

• level 1: valuation is based on quoted (non-adjusted) prices in active markets for identical assets or liabilities;

• level 2: valuation is based on information other than quoted market prices that is observable for the asset or liability, either directly or indirectly;

• level 3: valuation is based on unobservable information.

The fair value of financial assets and liabilities recorded at amortized cost approximates their carrying amount, except for borrowings and debts.

The fair value of bond debt is based on quoted prices (level 1). The fair value of other borrowings and debt is determined for each loan by discounting the expected future cash flows at the Euribor interest rate at the closing date, adjusted for the Group’s credit risk (level 2).

The fair value of monetary and non-monetary UCITS funds is measured based on the last known net asset value. The fair value of interest rate products (certificates of deposit, short-term deposits, negotiable medium-term notes, etc.) is based on the discounting of coupon flows (nominal and interest) over the remaining life of the product at the closing date. The discount rate used is the market rate corresponding to the maturity and product characteristics.

The fair value of derivatives is based on models commonly used to assess these financial instruments (models including observable market data). Counterparty default risk and credit risk have no material impact on the fair value of derivatives.

j) Deferred tax assets and liabilities

Thales recognizes deferred taxes when the tax value of an asset or liability differs from its book value.

Deferred tax assets are not recognized on the balance sheet if it is likely that the company concerned will not be able to recover them. To assess its ability to recover deferred tax assets, the Group takes into account forecast taxable income of the tax entities concerned, over a three to five year time-frame, the entity’s tax loss history, nonrecurring past events and tax strategies specific to each country.

k) Pensions and other long-term employee benefits

The Group’s defined benefit plan commitments are measured by independent actuaries using the projected unit credit method on the basis of estimated salaries at the date of retirement. The calculations mainly take into account assumptions concerning discounting as well as inflation, mortality and staff turnover rates, etc.

Changes in actuarial assumptions and experience adjustments – corresponding to the effects of differences between projected and actual results – give rise to actuarial gains and losses:

• actuarial gains and losses on post-employment benefits are recognized in full within other comprehensive income, and are not subsequently reclassified to profit and loss. Where appropriate, the same treatment is applied to adjustments linked to the ceiling on net assets for plans in surplus;

• actuarial gains and losses on other long-term benefits are recognized immediately in financial income (Note 9.3).

Past service cost, measured in cases of amendments or curtailments of plans, and plan settlements are recognized in full within other operating income (loss) in the period in which it is incurred.

Net interest expense, determined based on the discount rate of obligations, is recognized in financial income.

l) Share-based payment

Free share plans

Thales regularly grants performance shares to its employees. These allotments give rise to an expense representing the fair value of services received at the grant date. This payroll expense is recognized against equity.

The fair value of the services received is calculated by reference to the fair value of the shares at the grant date, less the present value of dividends forfeited by employees during the vesting period, taking into account the presence conditions.

Internal performance conditions are taken into account only by means of an adjustment in the projected number of instruments acquired by employees at the end of the vesting period. Therefore, they are not taken into account in the fair value estimate of the instruments granted, which is determined at the grant date.

The expense related to these plans is included in the income from operations with the consolidated reserves account as counterpart without impact on total equity. As the payment of compensation is subject to presence conditions, the corresponding expense is recorded over the vesting period on a straight-line basis. When appropriate, the expense is adjusted over the vesting period to reflect any losses of rights.

Phantom shares indexed to the value of Thales shares

As these are cash-settled plans, IFRS 2 requires an evaluation of vested services and the liability assumed at fair value. Until the payment of this liability, the debt is reassessed at the closing date and recognised in profit and loss. The reassessment of the debt takes into account the achievement of performance and/or presence conditions, as well as the change in value of the underlying shares.

m) Power Purchase Agreements

The Group has entered into agreements to procure clean energy providing for physical delivery of electricity.

An accounting analysis concluded that these contracts did not include any lease according to IFRS 16.

Note 14. Fees paid to statutory auditors

Total fees paid to Thales’ statutory auditors by the parent company Other services cover tasks required by law (e.g., interim dividend, and members of their consolidated networks for financial years capital increase, etc.) and other services compatible with the

2024 and 2023 (including Transport segment) are shown below. statutory auditors’ role (certification of expenditures, agreed procedures engagements, services of a tax-related nature without In 2024, the fees for the sustainability auditor were added. material impact, etc.).

_{In € thousands} Forvis Mazars EY PwC Total

2024	2023	2024	2023	2024	2024
5,698	6,300	6,953	6,016	—	12,651
857	930	424	414	—	1,281
4,841	5,370	6,529	5,602	—	11,370
—	—	—	—	788	788
—	—	—	—	788	788
—	—	—	—	—	—
889	746	1,096	992	—	1,985
176	266	120	108	—	296
713	480	976	884	—	1,689
6,587	7,046	8,049	7,008	788	15,424

2023

Certification of accounts 12,316

• Issuer 1,344

• Subsidiaries 10,972

Certification of sustainability

information —

• Issuer —

• Subsidiaries —

Other services 1,738

• Issuer 374

• Subsidiaries 1,364 TOTAL 14,054

Note 15. List of main consolidated companies

(excluding Thales SA, the parent company)

Company name 1. Consolidated subsidiaries ^(a)	Country	% Interest 31/12/24	% Interest 31/12/23
Advanced Acoustic Concepts, LLC	United States	100 %	100 %
Ground Transportation Systems Canada Inc	Canada	— %	100 %
GTS Deutschland GmbH	Germany	— %	100 %
GTS France SAS	France	— %	100 %
Imperva, Inc.	United States	100 %	100 %
Thales Alenia Space France SAS	France	67 %	67 %
Thales Alenia Space Italia SpA	Italy	67 %	67 %
Thales Australia Ltd	Australia	100 %	100 %
Thales Avionics, Inc.	United States	100 %	100 %
Thales AVS France SAS	France	100 %	100 %
Thales Belgium SA	Belgium	100 %	100 %
Thales Canada Inc.	Canada	100 %	100 %
Thales Defense & Security, Inc.	United States	100 %	100 %
Thales Deutschland GmbH	Germany	100 %	100 %
Thales DIS Brasil Cartões e Soluções de Tecnologia Ltda	Brazil	100 %	100 %
Thales DIS CPL USA, Inc.	United States	100 %	100 %
Thales DIS France SAS	France	100 %	100 %
Thales DIS Mexico SA de CV	Mexico	100 %	100 %
Thales DIS (Singapore) Pte Ltd	Singapore	100 %	100 %
Thales DIS Technologies B.V	Netherlands	100 %	100 %
Thales DIS UK Ltd	United Kingdom	100 %	100 %
Thales DIS USA, Inc.	United States	100 %	100 %
Thales DMS France SAS	France	100 %	100 %
Thales Espana Grp, S.A.U.	Spain	— %	100 %
Thales Ground Transportation Systems Ltd	United Kingdom	— %	100 %
Thales LAS France SAS	France	100 %	100 %
Thales Nederland B.V.	Netherlands	99 %	99 %
Thales Security Solutions & Services Company	Saudi Arabia	— %	100 %
Thales Services Numériques SAS	France	100 %	100 %
Thales SIX GTS France SAS	France	100 %	100 %
Thales Solutions Asia Pte Ltd	Singapore	100 %	100 %
Thales UK Ltd	United Kingdom	100 %	100 %
Trixell	France	51 %	51 %
2. Joint ventures & associates (equity method)
Airtanker Ltd	United Kingdom	15 %	15 %
Arab International Optronics	Egypt	49 %	49 %
Aviation Communications & Surveillance Systems	United States	30 %	30 %
Diehl Aerospace GmbH	Germany	49 %	49 %
Lynred	France	50 %	50 %
Naval Group	France	35 %	35 %
Telespazio SpA	Italy	33 %	33 %
Telit Cinterion	United Kingdom	25 %	25 %

(a) Companies with sales representing more than 0.5% of consolidated sales.

Exemptions for subsidiaries publication:

Gemalto BV (previously Gemalto Holding BV) has been exempted from its obligation to publish consolidated financial statements since 2019, as Thales applies the exemption 408 in the Netherlands.

German entity Electronic Signalling Services (ESS) GmbH, located at 1 Thalesplatz, 71254 Ditzingen, has requested to be exempted from its obligation to publish statutory financial statements for the year 2024, pursuant to paragraph 3, subparagraph 264, of the German Commercial Code.

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