Thales makes available its 2025 Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2025

7.1 Consolidated financial statements

7.1.1 Consolidated profit and loss account

(in € millions)

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

7.1.2 Consolidated statement of comprehensive income

(in € millions)

7.1.3 Consolidated statement of changes in equity

(in € millions)

(a) On 08 October 2024, the Board of directors decided to reduce the share capital of Thales by cancelling 4,268,227 treasury shares held in registered form, representing 2.03% of its share capital, with immediate effect.

Retained earnings include actuarial gains and losses on pension obligations amounting to -€335.1 million at end 2024 and -€244.1 million at end 2025.

7.1.4 Consolidated balance sheet

Assets

(in € millions)

Equity and liabilities

(in € millions)

7.1.5 Consolidated statement of cash flows

(in € millions)

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

7.1.6 Notes to the consolidated financial statements

All monetary amounts included in these notes are expressed in millions of euros.

• Note 1. Accounting standards framework 7
• Note 2. Segment information 9
• Note 3. Impact of changes in scope of consolidation and other non-current items 12
• Note 4. Property, plant and equipment and intangible assets 14
• Note 5. Investments in equity affiliates 16
• Note 6. Financing and financial instruments 17
• Note 7. Income tax 25
• Note 8. Equity and earnings per share 28
• Note 9. Employee benefits 30
• Note 10. Current operating assets and liabilities 34
• Note 11. Administrative, judicial or arbitration claims 37
• Note 12. Subsequent events 37
• Note 13. Accounting policies 38
• Note 14. Fees paid to statutory auditors 44
• Note 15. List of main consolidated companies 45

Note 1. Accounting standards framework

Thales’ consolidated financial statements for the year ending December 31, 2025 were approved and authorized for issue by its Board of Directors on March 2, 2026.

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 12, 2026.

Thales (parent company) is a French publicly traded joint-stock company (société anonyme) registered with the Nanterre Trade and Company Register under number 552 059 024.

1.1 Basis of preparation for the 2025 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, 2025.

These accounting policies, as described in Note 13, are similar to those applied by the Group for the year ending December 31, 2024.

The amendment to IAS 21 “The effect of changes in foreign exchange rates - lack of exchangeability” described in the Universal Registration Document 2024 has no impact on the Group's consolidated financial statements.

1.2 New standards mandatory after December 31, 2025

The new standards and interpretations adopted by the European Union and applicable to fiscal years opened from January 1, 2026 are as follows :

• Amendments to IFRS 9 and IFRS 7 "Classification and measurement of financial instruments";
• Amendments to IFRS 9 and IFRS 7 «Contracts Referencing Nature￾dependent Electricity”

Furthermore, in April 2024, the IASB published IFRS 18 "Presentation and disclosure in financial statements", applicable to annual periods beginning on or after January 1, 2027.

The potential impacts of these new texts are being analyzed.

1.3 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, lump￾sum 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.

Note 2. Segment information

2.1 Commercial activity and Adjusted EBIT by segment

In order to monitor the operating and financial performance of the entities, the Group’s management regularly considers certain key non-GAAP indicators as defined in Note 13-a, which enable them to exclude certain non-operating and non-recurring items.

In particular, Adjusted EBIT, of which the definition has been changed in the first half of 2025, corresponds to income from operations, plus the share in net income of equity affiliates, excluding (i) expenses related to business combinations (amortisation of assets valued as part of the purchase price allocation, other expenses directly linked business combinations) and (ii) the impact of changes in the Thales share price on the expense recognised in the income statement in respect of LTI plans.

(a) Excluding PPA and IFRS 16. Capital expenditures correspond to the net cash outflow as reported in the consolidated statement of cash-flows.

Business segments are presented in Note 13-a.

In 2025, sales include €211.0 million (€201.3 million in 2024) in other income, mainly subsidies and patent royalties. In 2025, as in 2024, the Group's activities are divided between civil customers, accounting for 44% (compared to 46% in 2024), and military customers, accounting for 56% (compared to 54% in 2024).

Information on key government clients is presented in Note 6.6-b. Moreover, the export turnover booked in 2025 with Dassault Aviation amounts to €1,013.8 million.

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.

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.

Order Book evolution:

Approximately two third of this amount is expected to convert into revenue within the next 3 years.

Cyber activities contribute as follows to the data of the Cyber & Digital sector :

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

(a) The retrospective application of the new definition of Adjusted EBIT (see Note 13-a) does not have a significant impact on fiscal year 2024.

2.2 Sales by country of destination

(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 Change in scope of consolidation

a) Disposal of Transportation business

On 31 May 2024, Thales finalised the sale of its Transport business to Hitachi Rail for an enterprise value of € billion 1,66.

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

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:

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

b) Other changes in scope of consolidation

Changes in scope of consolidation 2025

There is no significant change in scope in 2025.

Changes in scope of consolidation 2024

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 amounted to €53.0 million as of the end of 2024. In 2025, the Group carried out a purchase price allocation. After allocating to intangible assets (technologies and customer relationships amounting to €13.6 million and €12.2 million respectively, and the related tax), the residual goodwill amounts to €34.8 million.

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 defence, civil aviation, and emergency services sectors. The business has been consolidated since May 1, 2024.

The Group carried out an 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.

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 Group carried out an allocation of the purchase price. After allocation to intangible assets net of tax, the residual goodwill amounts to €519.3 million.

The balance sheet as of the acquisition date is as follows:

c) Project to merge the space activities of Thales, Airbus and Leonardo

In October 2025, Airbus, Leonardo, and Thales signed a Memorandum of Understanding (MoU) to create a leading European space player.

The combined entity will employ around 25,000 people across Europe. With an annual turnover of about 6.5bn€ (end of 2024, pro-forma) and an order backlog representing more than three years of projected sales, this new company will form a robust and competitive entity worldwide.

This is a major milestone in strengthening the European space ecosystem, supporting strategic autonomy and competitiveness, to ensure Europe enhances its role as a key player in the space global market.

Ownership of the new company would be shared among the parent companies, with Airbus, Leonardo and Thales owning respectively 35%, 32,5% and 32,5% stakes. It would operate under joint control, with a balanced governance structure among shareholders.

New company could be operational in 2027, subject to regulatory approvals and satisfaction of other closing conditions. The conditions for applying IFRS 5 relating to discontinued operations are therefore not met at the end of 2025.

In 2025, the turnover of the Space GBU amounted to approximately €2,400 million for a workforce just over 8,000 people.

3.2 Non-current income (expense) of operating activities

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