Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Thales Order Intake and Sales at September thirty, 2024 conference call. The presentation will be held by Pascal Bouchiat, Thales CFO. It will be followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded. I would now like to hand the conference over to Ms. Alexandra Boucheron, VP, Head of Investor Relations. Please go ahead, madam.
Good morning, all. Welcome, and thank you for joining us for the presentation of Thales' nine months 2024 order intake and sales. I am Alexandra Boucheron, the head of Investor Relations at Thales. With me today is Pascal Bouchiat, CFO of Thales. As usual, this presentation is audio webcasted live on our website at thalesgroup.com, where the slides and the press release are also available for download. A replay will be available soon after the end of the event. With that, I would like to turn over the call to Pascal Bouchiat.
Thank you, Alexandra, and good morning, everyone. Let me start with the Q3 2024 highlights before moving on to the numbers. I'm now on slide two. Q3 2024 has been a new quarter of strong commercial momentum, in particular in defense and security. This dynamic was notably driven by large orders. Over the quarter, Thales signed seven large contracts with a cumulative value over EUR 100 million, highlighting again our solid positioning in our major markets. I will come back in detail on this excellent performance later in the presentation. Sales growth was also sustained, reaching a 6.2% organic growth year-on-year over nine months. This performance was notably driven by strong growth in defense and security and robust trends in avionics.
Q3 was also marked by the announcement of a partnership with Mistral AI, one of the most powerful generative AI system on the market. Through this partnership, aiming at developing the use of generative AI within the group, Thales will accelerate its internal digital transformation while ensuring the strict protection of sensitive data. Lastly, we were proud to join the CAC 40 ESG Index in September. This comes as a new example of the recognition by the financial community of Thales' commitment and contribution to the protections of society, the planet, and individuals. Turning now to slide three with the snapshots of Thales' nine months and Q3 2024 key figures.
New orders amounted to EUR 15.6 billion as of end of September 2024, delivering a robust organic growth of 23% versus last year and reflecting the confirmations in Q3 of Thales' strong commercial activity. Sales came into EUR 14.1 billion, growing 6.2% on an organic basis over the first nine months, and 6.6% in Q3 2024. This performance puts us right on track to reach our 2024 target. Now, looking into details at our order intake. I'm now on slide four. As you can see, the strong organic growth we recorded in both Q3 and nine months is mainly driven by large orders. In Q3, we booked seven new large orders, which drives to a total of nineteen large new orders over nine months.
Large orders more than double year- on- year, which is a strong performance. All seven new large orders in Q3 were related to Defense and Security, reflecting the strength and the excellent dynamic of this business. It's also worth noting that out of the nineteen large orders awarded over the first nine months of 2024, two of them were related to space and one to avionics, demonstrating Thales leadership across all major businesses. The momentum is also good on smaller orders, with a 6% reported growth for orders below 100 million EUR coming from all our businesses, including our recent acquisitions. Turning now to slide five and nine months 2024 sales. I'll work first on currency and scope.
The currency impact was a little bit more material this quarter, EUR -22 million, leading to a EUR -38 million currency impact over nine months. As you know, the scope impact is much more significant, resulting from the acquisition of Cobham, Imperva, and Tesserent, partially offset by the disposal of the electrical activity. All in all, this translates into a positive impact of EUR 469 million, in line with expectations. The organic growth reached 6.2% over nine months. It was mainly driven by defense and security, with no surprise, but also by aerospace, which still experiments a solid momentum lifted by avionics, while space shows low single digits organic growth. D& S recorded stable organic growth, reflecting contrasting dynamics in the business that I will detail later in the presentation.
From a geographical perspective, nine-month sales organic growth was solid and well-balanced across the board, including good momentum in both mature and emerging markets. Let's now have a look on the performance of each segment, starting with aerospace on slide six. Orders in the aerospace segment came in at 3.6 billion EUR, up 8% in organic terms. This solid pace of growth reflects contrasting dynamics. Avionics continues to record a steady momentum with double-digit organic growth over nine months, driven by both military and civil activities. In space, order intake was down year-on-year, suffering from a challenging comparison basis. In fact, two large orders above 100 million EUR have been booked since the beginning of the year, versus five in 2023. Sales reached 3.8 billion EUR over the first nine months, an increase of 5.3% organically versus last year.
This sustained good momentum was notably driven by avionics, which recorded mid-single digit plus organic growth, in line with H1 2024 trends. This solid performance reflects the continued strong dynamic of our IFE and flight avionics OE businesses. However, we anticipate a slowdown in Q4 in avionics, with an expected slower pace of growth due to delays in delivery that our clients are currently facing. Space recorded limited growth over nine months, with low single digits organic growth in line with our expectations. Turning now to slide seven, looking at the defense and security segment. Order intake amounted to EUR 9 billion in nine months, 2024, which translates into an organic growth of 40% for the year versus last year. As you can see, the momentum continues to be very strong in this segment, and Q3 has been, again, a strong quarter.
Defense and Security indeed booked seven large orders over the quarter, among which the production of seven additional section of the SAMP New Generation for the French Air and Space Forces, or two major contracts with the U.K. government to provide short-range missiles. Our backlog in defense and security reaches a new high at 37 billion EUR, representing close to 3.8 years of sales, providing a very comfortable level of visibility. Sales came at 7.2 billion EUR, an increase of 8.5% in organic terms versus last year. This solid level of growth reflects a continued positive trend across most business lines. With the strong backlog mentioned previously and our continued effort to ramp up production and delivery capacity, this sustained pace of growth should continue in Q4. Now, looking at digital identity and security on Slide 8.
As commented earlier, please keep in mind that nine months 2024 figures integrate operative scope effect linked to the acquisition of Tesserent and Imperva. Additionally, I remind that 2023 figures have been restated to include cyber & civil activities transfer from the defense and security segment. At EUR 2.9 billion, sales are broadly flat, organically year-on-year. Here again, this performance reflects contrasted dynamics. In banking and payment services, we keep seeing this destocking in North America that is lasting a bit longer than expected. This decline in this activity is however offset by a good momentum in other activities, namely cybersecurity and biometrics activities are indeed recording a continued steady pace of growth, and connectivity solutions are delivering double-digit organic growth, reflecting our continued ramp up on this market. Finally, concluding with slide nine and a reminder of our financial objective for 2024.
As you understood, Q3 performance was solid across the board, with a good momentum in most of our businesses. This enable us to confirm all our objectives for this year. Book-to-bill ratio will be above one. Sales are expected to grow organically between 5% and 6%, which corresponds to a range of EUR 19.9 billion to EUR 20.1 billion based on September 2024 foreign exchange rates. An EBIT margin is expected between 11.7% and 11.8%. Many thanks again for your attention, and I will now be pleased to take your questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one one on your telephone and wait for your name to be announced. We will now take the first question. Coming from the line of Olivier Brochet from Redburn Atlantic. Please go ahead.
Yes, good morning. Yeah, Red Bull is definitely what I need, so early in the day. Thank you, and good morning, Pascal. I have two questions, please. The first one on space. Revenues were stable in H1. They are growing, low single digits in nine months, so growing in Q3. Is that sustainable, do you think? And the second question is on DIS. Volumes were bad in banking cards. Can you give a bit more color between volumes and pricing, how this developed and whether this has any consequences on margins, going forward? Thank you.
Okay, good morning, Olivier. So starting with space, overall, I mean, considering the full year of 2024, stable to low single digits organic growth for me is what we have in mind. So will it be one, two, or three? I mean, but this is really, I mean, this type of organic growth that we expect for the full year in space. As you know, I mean, we might have a bit of up and down between stable and low single digits.
For me, it's not that material, but overall, I mean, stable to low single digits is probably a good rule of thumb to anticipate the 2024 landing for our space activity. So, DIS, you mentioned specifically, I mean, banking. I guess that you've also noticed that, I mean, the rest of our business is doing pretty well, in particular cybersecurity, biometrics, the new digital product for secure mobile connectivity. Now, it's true that on banking and payment, we see today a market which is down versus last year. And with, I mean, this is mainly destocking in U.S.
I mean, we're expecting, I mean, this destocking, I mean, to stop a bit, a bit earlier. It has continued in Q3. My view is that probably Q4 would be slightly better in terms of demands. So is it the end of the destocking? Probably a bit, a bit too early, but we see at least, I mean, the situation stabilizing and a bit of positive news in this market. It is essentially a volume drop, I mean, in terms of demands.
Of course, each time you discuss about less demand, you could consider a pressure on prices, but I can tell you that we are, we're making sure, I mean, to preserve our level of margin and our banking and payments segments in 2024 will still be a quite profitable business with level of margin probably between 15% and 18%. Probably a good rule of thumb, I mean, for you to assess the level of margin on this business. So you see, I mean, quite good level of margin, and this is basically what we are striving for.
Excellent. Thank you so much.
Thank you. We will now take the next question from the line of Chloé Lemarié from Jefferies. Please go ahead.
Yes, good morning. Thank you for taking my question. I'd have two, on my side. The first one would be on the free cash flow, because previously you'd mentioned about 100% conversion for the year. Given you've had very solid order intake, in particular on the large order, could you maybe say if you have, like, a different view on that 100% conversion in terms of potential, you know, larger advances you might be receiving at this point? And the second one is on the French tax measures. If you could share maybe first view on potential impacts and how you would treat those, and whether the potential tax on buyback would change your appetite for buyback as opposed to other forms of distribution going forward. Thank you.
Okay, good morning, Chloé. On your first question about a free operating cash flow, I mean, I keep confirming a level of conversions ratio of around , 100% in 2024. It's true that overall, I mean, in term of commercial momentum, I tend to believe that at this point, it's a bit better than expected. Now, you also need to take into account two points. I mean, first, I mean, we've got, of course, some order intake that do not come along with significant down payment, in some cases, no down payment, in particular, in domestic activity. In general, there is no down payment.
Down payment is, in most cases, more a pattern, which relate to export contract. So, no, I mean, one of the versions of conversions on continued operations is basically what I have in mind. Second point on the French tax. So I will answer on the potential impact on our PNL, and I will ask you to elaborate a bit more on what you mentioned about share buyback, to make sure that we understood your question. So on French tax, I mean, first, I think it's important to consider that the 2025 budget is today under discussions at the French Parliament.
There are a number of discussions of amendments, of back-and-forth discussion, and this will continue at least until mid-December, with, of course, uncertainties of the outcome of this project at this point. Second point, it is true that the government in this project mentioned that he would like large companies based in France to contribute exceptionally in 2024 and 2025, for the 2024 fiscal exercise and the 2025 fiscal exercise, on a specific exceptional income tax charge.
Overall, what the French government has in mind on this matter regarding the 2024 fiscal year is to move up the tax rates from 25.8% to 36.1%, this relating to 2024. And that, what I've also mentioned is that relating to the 2025 fiscal year, the tax rate would move from 25.8- 31.1%. And then it would come back to, as from 2026, it would come back to the standard level for all companies, which is 25.8%. Now, what would be the impact for Thales?
The impact for Thales on the 2024, on our 2024, PNL, would be an additional charge, which would be probably around EUR 70 million in term of additional tax, income, for income tax for Thales. It would represent EUR 35 million in 2025. So this is where we stand today on this, on this matter. Once again, at this point, just a projection, as I mentioned, a number of discussions, so we need to be a bit more patient and to wait until, I mean, the 2024-2025 budget is finally approved. On your second questions, which regard to share buyback, Chloé, what was the, I mean, to make sure that we understood?
Yes, maybe I'm jumping ahead a little bit there, but my question was essentially if that 8% tax on buyback would, in the midterm, you know, durably change your view on whether you would consider buyback over other forms of cash returns?
Okay, probably a good occasion for me to explain a bit more. I mean, the figures that you have mentioned, 8%, it's not 8% on the share buyback investment on the acquisition price. It is 8% of the nominal capital of the company, plus the premium that have been recognized on this capital. When you put all of that together for a company like Thales, this additional tax would represent probably something like a bit more than 1% of any share buyback program. And I guess it's quite clear from this statement that this represents an additional charge that wouldn't change overall our perceptions to move on this type of program.
Once again, and of course, I need to be clear. Share buyback, at the end of the day, is the decision of our board, but I think it's important for me to share this figure because 8% seems pretty high, but it is applying on a underlying amount, which is quite significantly reduced as compared to what would be a share buyback, investments overall.
Perfect. Thank you so much.
Thank you, Chloé.
Thank you. We will now take the next question from the line of George Zhao from Bernstein. Please go ahead.
Hi, yeah, good morning, everyone. You know, first question on avionics. You mentioned the slowdown in Q4. I guess, what kind of growth are you expecting for Q4, given that slowdown? And remind us, what's the OE versus aftermarket breakdown within the avionics? Second one on defense. I think in the press release, you had some, you know, more positive comments here than in the past, you know, calling this unparalleled visibility. So what does this mean for the growth outlook, though? You know, we've only seen very minor tweaks from mid-single digit to mid-single digit plus growth, in recent years. So I need clarity on that. Thanks.
Okay. George, I will start with your second question because it was more clear. And the light is not that great, so let me start on this one, and we'll ask you to repeat your questions on your first one. So, on defense, it is true that overall, I mean, the level, of course, that we delivered in the first nine months of 2024 is a bit above our expectations, 8.5%. And what I mentioned is that I'm expecting our Q4 growth in defense and security to be quite close to this level.
Which means that overall, 2024, in terms of organic growth, would be probably, I mean, close to what we have just delivered on the first nine months, which is overall pretty good. Now, I mean, what does it mean for the future? As you know, I mean, we will have our capital market day in a few weeks, where we'll discuss about what we expect in terms of growth for all our businesses. My view in the midterm, in the next few years, and considering that I think, I mean, this level of top-line growth of 8.5% is not, you know, sustainable in the long term, overall.
Probably what we are going to share with you is a level of organic growth for our defense in the next five years. That should be probably between 6% and 7%. This is today my view on the long term. Can you come back on your first question?
Yes, sure, yeah. Just on avionics, you know, you hinted at slowdown in Q4.
I was just wondering, what are you expecting? And remind us, what's the current OE versus aftermarket revenue breakdown within the avionics?
Okay. So, it is true that what I said, it overall, I mean, in the first nine months of 2024, we are overall pretty happy with the overall revenue growth of this business. I mean, a mid-single digit plus overall top line growth, which is. I mean, you asked for a split between aftermarket and OEM. Aftermarket is more mid-single digits, and OEM is at this point more closer to double digits. First point. Second point, what I mentioned in my presentation is that we expect a slowdown in Q4 and in particular when it come to IFE business. Also a bit on our cabin connectivity business, but in particular on IFE.
The reasons has nothing to do with Thales. It is because we see our clients, and in particular, when I talk about IFE airlines, being more and more penalized by late deliveries of both aircraft, when it comes to new aircraft delivery, but also when it comes to cabin retrofits, are penalized by late delivery from some seat manufacturers. It's true that a number of our clients at IFE have asked us, I mean, to stop delivery because they don't have either, I mean, the seat they need or the aircraft that they are still waiting to be delivered. I mean, the impact overall, when I look at Thales overall in 2024, in term of level of revenue, is not that important.
But overall, it's something that could represent probably something around 100 million EUR of missed revenue for avionics in 2024. Now, the good thing is that it's gonna be postponed, and hopefully both Airbus, Boeing, and the seat manufacturers will be able, I mean, to recover in terms of speed of delivery.
Understood. Thanks.
Thank you. We will now take the next question from the line of Carlos Iranzo Peris from Bank of America. Please go ahead.
Hey, guys. Good morning, and thanks for taking my questions. I just wondered, how are you doing in terms of supply chain in defense and particularly if you could provide an update about the sourcing of PCBs, that would be great, please. Thank you.
Okay. Good morning, Carlos. So overall, defense and supply chain overall, I mean, overall, I see, I mean, some improvements on supply chain for our defense and security business. And probably more on the hardware part of supply chain than on PCBs. So yes, overall, probably doing a bit better. We still I mean, PCBs, in particular, in Europe and in particular in France, still significant difficulties to get the right level of supply on PCBs. Now, you have seen that it has not prevented us, I mean, to deliver a level of revenue that is overall above expectations, but at the expense of a number of disruptions, difficulties, arbitrage within our various businesses.
So a situation which, in my view, is not sustainable. So it's very important that we keep working very hard on this matter, so that, I mean, PCB availability will increase for us. I mean, to come back to a more normal way of operating our plants, which is still not the case today. So in a nutshell, at this point, quite a low impact in term of revenue, but a number of difficulty, disruptions, that is, of course, not positive.
Okay. Very clear. Thank you.
Thank you. We will now take the next question from the line of Hervé Drouet from CIC Market Solutions. Please go ahead.
Yes. Good morning, all. Two question as well on my side. Coming back on DIS, is there other geographic area where there has been destocking outside the U.S., or is it purely U.S. problems on the payment card?
And also, would you be able maybe to give us a bit of, an update on how the dynamics at Imperva, in cyber, is doing, especially on, the first nine months or on-
... for the third quarter? And the second question is, there has been, renewed, press articles potentially saying you might be interested again in BDS, in some activities in BDS, in Atos. I was wondering if, if you can give us, maybe an update as well on that front.
Thank you.
Okay. Good morning, Hervé. So let's start with DIS. No, I mean, this destocking is essentially a North American and a U.S. issue. This is not what we see in other geographies. Now, it's also important to bear in mind that U.S. is by far our largest market. This is why it is quite material overall in term of defense for this banking and payments segment. Imperva is doing well, both in term of integration. By the way, I mean, our head of Global Product Cybersecurity, Sébastien Cano, will be present at our Capital Market Day, and will present it's business, and we will of course update you on how things are going on on Imperva.
But so far so good. With, by the way, a level of profitability which is a bit above what we are expecting. So points on, I mean, press articles about Thales. We have not changed our view on this matter. We said that we are not interested in buying BDS at Atos. What we said is that within BDS, there is a small size defense business which represent between EUR 200 and 300 million of annual revenue. And we said that in case this business would be for sale, we would look at the case. I mean, we keep looking at a number of potential acquisitions, small size acquisitions across the board.
We have just completed a very small size acquisition in the U.S. from Boeing, in defense. It's quite a small one, acquisition. There's not been any press articles. And overall, of course, as Atos is a French company, there is always, I mean, a number of press articles. So my point is quite clear. We would be interested potentially on this quite small size defense business, in case it would be for sale. Nothing more to say on this matter.
All right. Thank you very much.
Thank you very much, Henry.
Thank you. We will now take the next question from the line of Christophe Menard from Deutsche Bank. Please go ahead.
Yes, good morning. Thank you for taking my question. I had two, actually. The first one was, just on the point you mentioned. The Boeing, the small acquisition you made from Boeing, can you elaborate a little bit more? I mean, you say it's small size, but at the same time you're saying the EUR 200-300 million is kind of small size as well. Is it the same type of size? And what is the rationale, where is it coming from? Is it really something that you did as an opportunity, given the situation at Boeing? Or is it something that had been in the making for a long time? And the other question is on space, orders.
Can you update us on IRIS, which because we've seen a raft of order intake in the last two, I mean, two to three weeks in space, more institutional orders. When would you expect IRIS to actually become an order for you? And can you provide any update on this? Thank you.
Okay, Christophe. So, on your first point about this small size acquisitions, Thales buying a small size business at Boeing, it's a business that represents a bit less than EUR 100 million of annual revenue. So you see, it's quite a small size acquisition. This business is in particular in military electronic warfare, which is, as you know, well, one of our core business at Thales overall. With the intent to seek opportunity to develop in other geographies, in this case, in North America, complementing pretty well our tactical radio, secure radio communication business for military purpose, also in the U.S.
As you know, I mean, when looking at different activities, Thales in the U.S., we are present today essentially on tactical radio communication, but also on naval and in particular on sonar, where we have a pretty strong position there. This is also where maybe you have in mind that we made the acquisition of a JV. A few years ago, we took over the share of DIS in a small size sonar business, which is for us a perfect go-to market for sonar business to the U.S. So this small size acquisition from Boeing is really for us to add a third layer, which complements very well from a strategic and technological standpoint, our tactical radio communication business.
So that was the rationale. And more than, I mean, the size of this acquisition, it's more the fact that we keep looking at opportunities, small size opportunity, as I keep mentioning, with, I mean, quite obvious acquisition criteria, expanding presence in some geographies where we see a clear potential for growth. Complementing our spectrum of technologies, easy to integrate, and also with, I mean, the type of acquisitions helping in term of overall growth with, in our view, also a decent valuation. Space orders, it's true that there's been a few announcements in the last few weeks, more on the institutional standpoint.
We need to be a bit careful because, in particular, when you talk about this type of announcements and business, the order intake can be split in a number of steps. So of course, it's positive news, of course, and this very much in line with what we keep saying about the good quality of the observation, exploration, and navigation segments at our space business. Where, I mean, we've got, in particular, the Open Space Agency quite leadership position. And the three announcements that took place last week, or, I mean, the week before, I mean, for me, it's quite a good demonstrations, the fact that this business is doing pretty well. On IRIS², do you have any update?
IRIS², so no, I mean, the European Commission keeps working pretty hard on this matter. We were not anxious, but we are questioning ourselves about, I mean, the new commission and the change of the commissioner in charge of this topic. Now, what we see is the European Commission, the new one, I mean, with the new commissioner, being still quite active to bring this very large project forwards. So at this point, it is a potential pretty substantial opportunity.
At the same time, it is, at this point, just a potential opportunity, and as you have understood, Christophe, I think, we are very much focused on our cost adaptation program in order, I mean, to bring, this business back on its feet in terms of profitability. This, I mean, regardless of whether or not this IRIS² project will materialize. Thank you very much.
Thank you. We will now take the next question from the line of Ross Law from Morgan Stanley. Please go ahead.
Yes. Morning, Pascal. Thanks very much for taking my questions. I have two, please. The first on sales and the confirmation of guidance, which implies a pretty meaningful deceleration in growth in Q4. You've called out DIS continuing at the sort of 8-9% rate, space flat, closing with digit, which is probably a little better than we were all expecting. So where is the big slowdown coming from in the rest of aerospace and DIS to meet your organic,
... guidance range?
And secondly, on orders, do you expect to record the Serbian Rafale deal in Q4? And what size of a down payment can we expect there? Thanks.
Okay. So, good morning, Ross. So on sales, overall, and a few swings, overall organic growth 6.2%, and we said that, for the full year, it would be between 5 and 6%. So for me, it's, we're quite close. I mean, we're slightly above full year guidance, but for me, it's very, very close to this overall range from 5- 6%. With, I mean, for me, what is probably better than expected is what I said about defense.
On the other side, it's true that I mentioned that we are expecting, I mean, avionics to, I mean, Q4 in avionics, that will be a much less favorable for the reasons I mentioned, with in particular at IFE, but also in our cockpit avionics business. Some slowdown because of the issues at our client that I've mentioned earlier. And overall, DIS, in my view, should be positive in Q4 overall. So when you put all of that together, I think that you will end up between five and six. That's probably where we expect to land.
On Q4 down payments, your question was specific to Rafale, so, what we expect, I mean, in Q4, in term of down payment, is the Rafale in Serbia, that we have announced a few weeks ago. This is where we expect, I mean, down payments to kick in, which would probably trigger, I mean, the recognition of the order in our Q4 order intake. This is today, I mean, what I have in mind in term of, let's say, a significant large export project in defense.
Okay. Thanks so much.
Thank you.
Thank you. As a reminder, if you wish to ask a question, please press star one and one. We will now take the next question from the line of Aymeric Poulain from Kepler Cheuvreux. Please go ahead.
Yeah, thank you. Good morning. Most of my question have been answered, but there's one question that pop up since you put this partnership with Mistral AI in as a first slide. What kind of internal productivity benefit or external opportunity can be derived from from this partnership, or significant is this is for for Thales? And since we're on AI, in the next few weeks, we're gonna have this report by the the hyperscaler in the AI space with gigantic data center CapEx. And of course, you're exposed to data growth with the cybersecurity. So what kind of impact this AI boom is driving at Thales?
Okay. Aymeric, good morning, first. It's a global question I'm not sure that we'll be able to answer in just a few seconds. It's of course, I mean, some topics that we come back in detail at our capital market day, so please be patient, and you will see, I mean, to which the scope of what AI represents for Thales, and I think that you will be amazed by the fact that we'll develop AI across the board both internally, but first, I mean, to develop a business at our clients.
Now, I mean, to be more specific, about this announcement in Q3, this partnership with this company, Mistral AI, which is today a big startup, but which has managed to develop quite effective LLM, which also provide us with a very high level of protection and sovereignty, which is for us in particular importance when it comes to defense and security business and when you come also to internal processes. So this partnership is first and foremost towards our own internal usage of AI in our own internal processes, whether it is support functions like I don't know, HR, finance, legal, but plus also processes that can embrace industry, engineering, as well.
At this point, it's probably too early, I mean, to mention about what it means in term of productivity, because if I would mention a figure, I think that it would be a bit dangerous. So, let me stay at this point more on a qualitative tone. But what you need to understand is that a company like Thales also be aiming to capitalize on a partner that can also come up with quite a sophisticated LLM, together with... I mean, preserving all the sovereignty aspects of AI development in a company like Thales is quite important, and this is basically what we're talking about on this matter.
Now, no specific comment on the announcement of large hyperscalers about the need of investing on nuclear power production, but showing, I mean, the development of AI. And once again, we'll come back on this matter on November the fourteenth, with potentially also some demos on this matter.
Great. Thank you.
Thank you. There are no further questions at this time. I would like to hand back over to Pascal Bouchiat for closing remarks.
Okay, thank you, thank you very much. So, let me conclude this call by stressing that we warmly invite you to physically, if you can, otherwise remotely, attend to our 2024 capital market day, if you didn't already register. So this capital market day that will be held in Paris on the 14th November, starting from noon. There will be, as I mentioned, many product demos, and we invited each of the heads of our business units to speak about their activity and to answer to any of your questions. And I will also, as you know, give you further granularity about our 2028 trajectory. Very excited to welcome you at this Capital Market Day. In the meantime, don't hesitate to reach out to Alexandra and her team if you have further questions.
Since our Capital Market Day is coming very soon, we'll enter back into a quiet period starting from the thirtieth of October after market. I wish you all a very good day. Bye-bye, and see you back on 14th November .
Thank you. Ladies and gentlemen, if you didn't have a chance to ask your question on today's call, please do not hesitate to send your question to Thales Group Investor Relations at ir@thalesgroup.com, and we will get back to you as soon as possible. Thank you all for your participation. You may now disconnect.