Thales has outlined ambitious plans for revenue and profit growth as it capitalises on the increasing demand for advanced cybersecurity solutions in the face of escalating digital threats worldwide. The French defence and technology giant, a prominent player in the cybersecurity market, aims to achieve a 5% to 7% annual growth rate, targeting over €25bn in revenue by 2028.
The growth strategy is underpinned by Thales’ decade-long investments in cybersecurity, a sector it has bolstered significantly through acquisitions, including the purchase of US-based cybersecurity firm Imperva in 2023.
Cybersecurity takes centre stage
Thales CEO Patrice Caine emphasised the growing importance of cybersecurity, driven by increasing cyberattacks and data privacy concerns. He added that Thales, already ranked among the top five global players in cybersecurity, plans to expand its offerings to high-demand sectors like banking and energy, where premium-grade data security solutions are essential.
The company’s cybersecurity division is projected to achieve organic sales growth of 6% to 7% annually through 2028, with an EBIT margin target of 16% to 17%. Thales intends to combine its traditional data encryption capabilities with advanced preventive technologies to detect and address vulnerabilities in networks.
While cybersecurity leads Thales’ growth strategy, the company also stands to benefit from increased defence spending worldwide. Caine predicted a sustained rise in global defence budgets over the next decade, positioning Thales’ defence portfolio to capture new opportunities.
“Through these times, we have improved the quality of our businesses with active portfolio management, strengthening our core Defence and Aerospace portfolio while transforming and scaling up our Cyber & Digital business”, said Caine. “The strong platform we have built with unique leadership positions across our three markets, our ability to innovate and anticipate technological disruptions and our strong pipeline of new premium products & services enable us to look forward to the next chapter of accelerated and sustainable growth with confidence.”
Thales expects to boost its operating margin to 13%-14% by 2028, up from 11.6% in 2023, supported by growth in cybersecurity, defence, and avionics. The company also aims to improve profitability in its aerospace division, primarily by recovering its space business margins to over 7%.
To sustain its growth trajectory, Thales plans to integrate its recent acquisitions, including Imperva and Cobham AeroComms, ensuring synergies in revenue and profitability. It also intends to maintain high cash conversion rates, averaging between 95% and 105%, over the next four years.
Thales’ focus on cybersecurity places it in direct competition with tech giants like IBM, which also targets premium data security markets. Meanwhile, some defence rivals, such as US-based RTX, have divested their cybersecurity units, leaving Thales in a seemingly stronger position in this rapidly expanding sector.
Despite the promising outlook, analysts suggested that Thales’ growth forecasts could have been bolder, given the geopolitical uncertainty driving defence and cybersecurity demand. Shares in the company fell 1.5% following the announcements, reflecting cautious investor sentiment.
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