Thales Sets Higher 2026 Goals, Faces €450M Charge After F126 Program Halt
Thales Adjusts Financial Outlook Following F126 Frigate Programme Cancellation
Exceptional Charge and Financial Impact
July 3 (Reuters) - French defence group Thales said on Friday it would book an exceptional charge of about €450 million ($514.58 million) in the first half of 2026 after Germany scrapped the F126 frigate programme, while raising its 2026 order intake and cash generation targets for the year.
Effect on Net Profit and EBIT
Thales said the mostly non-cash charge would reduce group net profit by about €350 million but would not affect adjusted earnings before interest and taxes (EBIT), adjusted net income or have a material impact on operating free cash flow.
Compensation and Damages
It added that it would seek compensation for work already carried out and damages linked to the cancellation.
Revenue and Margin Outlook
Limited Revenue Impact
The group said the programme's termination would have a limited impact on revenue of around 0.5% in 2026 and less than 1% annually thereafter and a marginally positive effect on adjusted EBIT margin.
Updated Financial Targets
Book-to-Bill Ratio and Cash Conversion
It now expects a book-to-bill ratio above 1.10, versus 1.0 previously, and cash conversion of 100%-110%, up from 95%-100%, while confirming 2026 organic sales growth and adjusted EBIT margin targets.
Exchange Rate Information
($1 = 0.8745 euros)
Reporting Credits
(Reporting by Hugo Lhomedet; Editing by Mark Porter)
