Levy: Upbeat on profitable growth.
The outgoing head of France’s Thales sought to reassure investors that a new global focus at the aerospace and defence group was irreversible, as he unveiled his last quarterly figures containing a boost from developing economies.
The company on Thursday reported flat nine-month revenue and 3% growth in orders, kept aloft by a 10% rise in the intake from emerging markets as European defence cuts bite.
Thales, 26% owned by the French state and 25% by Dassault Aviation, also said on Thursday its sales fell 3% on a like-for-like basis in the January-September period, while the underlying order intake was flat.
The maker of avionics and weapons systems confirmed its full-year goals and said it had begun the search for a chairman and chief executive to replace Jean-Bernard Levy.
Levy was picked by the French government in a surprise move earlier this month as the next head of power utility EDF to replace ousted chairman and chief executive Henri Proglio.
Levy’s job switch leaves a vacancy at the helm of Europe’s largest defence electronics group, whose shares have underperformed the Paris benchmark CAC 40 index by 12% since the move was announced on October 15.
Levy, who has been credited with easing labour tensions and moving Thales beyond mere cost-cutting and towards growth, said in his first indirect comments on the management changeover that the company’s new direction would be maintained.
“Thales has now set its sights on a clear-cut ambition, reflected in continued efforts to improve competitiveness and priority given to growth in emerging markets,” he said.
He expressed confidence in the company’s ability to deliver “sustainable, profitable growth”.
Internal candidates to replace him could include Chief Operating Officer Patrice Caine, seen by some media as his natural successor, or Pascale Sourisse, senior executive vice-president for international development, whose name has twice before been linked with the roughly 1mn euros-a-year role.
Some industry sources have also suggested Airbus Group strategy chief Marwan Lahoud as a possible external contender, but Lahoud recently ruled himself out of the race to succeed the head of aero engines, defence and security equipment maker Safran, saying through a spokesman he was staying at Europe’s largest aerospace group.
The combination of the two vacancies could trigger a shake-up of top jobs in the French defence industry and Safran’s CEO, Jean-Paul Herteman, who is expected to stand down next year, said earlier on Thursday that the search for a successor was going smoothly.
Levy remains at Thales pending an official handover at a meeting of state-controlled EDF’s shareholders on November 21.
Fresh orders at the nine-month stage were dominated by Thales’s aerospace business, which posted 34% growth in orders compared with 4% higher revenue.
Thales echoed other aerospace companies including Safran in reporting strong momentum in commercial aviation activities despite recent investor worries about a downturn.
Defence, security and transport orders and revenue fell.
