Thales : 2022 Half-yearly Financial Report

Half-yearly financial report 2022

Report on business activity

Consolidated financial statements

HALF-YEARLY FINANCIAL REPORT 2022

TABLE OF CONTENTS

Declaration from the person responsible for the half-yearly financial	1
report
Report on 2022 first-half business activity and results	2
o	Key figures	2
o Presentation of financial information	3
o	Order intake	7
o	Sales	8
o	Adjusted results	10
o	Consolidated results	11
o Financial situation at 30 June 2022	13
o	Related party transactions	14
o Main risks and uncertainties in the second half of 2022 fiscal year	14
o Outlook for the current year	14
o	Appendix	16
Consolidated financial statements at 30 June 2022	18
o Consolidated profit and loss account	19
o Consolidated statement of comprehensive income	20
o Consolidated statement of changes in equity	21
o	Consolidated balance sheet	23
o Consolidated statement of cash flows	24
o Notes to the consolidated financial statements	25
Statutory auditors' report	41

The English language version of this report is a free translation from the original, which was prepared and filed with the AMF in French language. All possible care has been taken to ensure that the translation is an accurate presentation of the original. However, in all matters of interpretation, views or opinion expressed in the original language version of the report in French take precedence over the translation.

Report on 2022 first half

business activity and results

Key figures1

In € millions,	H1 2022		H1 2021		Total	Organic
		change	change
except earnings and dividend per share (in €)
Order intake	11,208		7,665		+46%	+43%
Order book at end of period	37,988		34,744		+9%	+9%
Sales	8,256		7,669		+7.7%	+5.4%
EBIT2	891	722	+23.4%	+21.1%
as a % of sales	10.8%	9.4%		+1.4 pts	+1.4 pts
Adjusted net income, Group share2	726		591		+23%
Adjusted net income, Group share, per share2	3.41		2.78		+23%
Consolidated net income, Group share	566		432		+31%
Free operating cash flow2	820		420		+400
Net cash (debt) at end of period2	-894		-2,4963		+1,602

1. In order to enable better monitoring and benchmarking of its financial and operating performance, Thales presents adjusted data, including EBIT and adjusted net income, non-GAAP measures, which exclude non-operating and non- recurring items. Details of the adjustments are given in the "Presentation of financial information" in this report
2. Non-GAAPfinancial indicators, see definitions in the appendices, page 3.
3. Net debt as at June 30, 2021.

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Presentation of financial information

Accounting policies

Thales's condensed interim consolidated financial statements for the six months ended 30 June 2022 have been prepared in accordance with the provisions of IAS 34 (Interim Financial Reporting) and with the International financial Reporting Standards (IFRS) approved by the European Union at 30 June 20224.

The condensed interim consolidated financial statements are consistent with the accounting policies applied by the Group for the full-year financial statements at 31 December 2021 (as described in the notes 1 and 13 to the consolidated financial statements).

Adjusted income statement

In order to facilitate the monitoring and benchmarking of its financial and operating performance, the Group presents three key non-GAAP indicators, which exclude non-operating and/or non- recurring items. They are determined as follows:

• EBIT, an adjusted operating indicator, corresponds to income from operations plus the share in the net income of equity-accounted companies, before the impact of entries recorded as part of business combinations (amortization of assets valued when determining the purchase price allocation, other expenses directly related to acquisitions).
• Adjusted net income corresponds to net income, excluding the following items and net of the corresponding tax effects:
• • amortization of assets valued when determining the purchase price allocation (business combinations);
  • expenses recognized in income from operations or in finance costs that are directly related to business combinations;
  • gains and losses on disposals of assets, changes in scope of consolidation and other;
  • impairment of non-current assets;
  • changes in the fair value of derivative foreign exchange instruments (recognized under
    "Other financial income and expenses" in the consolidated financial statements);
  • actuarial gains (losses) on long-term benefits (recognized under "Finance costs on pensions and other long-term employee benefits" in the consolidated financial statements).
• Free operating cash flow corresponds to the net cash flow from operating activities before contributions to reduce the pension deficit in the United Kingdom, and after deducting net operating investments.

Defining EBIT and adjusted net income involves defining other aggregates in the adjusted income statement: adjusted cost of sales, adjusted gross margin (corresponding to the difference between sales and the adjusted cost of sales), adjusted indirect costs, other adjusted financial income, adjusted financial income on pensions and long-term employee benefits, adjusted income tax, adjusted net income, Group share, per share, calculated as described on pages 5 and 6.

4 Available at https://ec.europa.eu/info/law/international-accounting-standards-regulation-ec-no-1606-2002

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