Ladies and gentlemen, good morning, and thank you for standing by. Welcome to the today's Thales Conference Q1 twenty twenty one Order Intakes and Sales. There will be a presentation followed by a question and answer session. Presentation I must advise you that this conference is being recorded today. And I would now like to hand the conference over to your speaker today, Mr.
Bertrand Delcare, VP Head of Investor Relations. Please go ahead, sir.
Yes, hello. Good morning, and welcome, and thank you for joining us for the presentation of Thales' Q1 twenty twenty one order intake and sales. I'm Bertrand Delcare, the Head of Investor Relations at Thales. With me today is Pascal Bouchiat, our CFO. As usual, the presentation is audio webcast live on our website at thalesgroup.com, where the slides and press release are also available for download.
A replay of the call will be available right after the call. With that, I would like to turn over the call to Pascal Boucher. Thank you, Bertrand, and, good morning, everyone. Before moving on to the numbers, as usual, I wanted to highlight a few recent events. I'm now on slide two.
First of all, space. As all of you remember, the business faced a couple of difficult years on the back of the softness of the telco market. In the full year results presentation, Patrice mentioned the successes we had last year in Earth observation and space explorations. As you will see later in more details, Q1 is confirming this good dynamics in term of commercial activity. Sales improved strongly and we expect the positive trends to continue over the rest of 2021 and beyond.
The second important point I wanted to stress, as I'm sure you have immediately noticed from our announcement this morning, is that sales were already back to growth in the quarter. In other words, in Q1, we were already able to offset the downturn in civil aero and biometrics and to a lower extent, the cyclical headwinds in banking terms. Of course, I will come back on this point in greater detail in the next slides. Last topic I want you to highlight is how we keep investing on the topic of sustainability. The universal registration documents, which we disclosed mid April and the integrated reports, which was released this morning ahead of the AGM this afternoon, described our progress and action plans in many areas of sustainability.
A powerful move in which I strongly believe was a decision we took earlier this year to include quantitative CSR KPIs in the remunerations of the majority of the teams. This CSR component applies to all employees who benefit from the viable remuneration. More than 54,000, I. E. More than two thirds of Thales employees from ex com members to managers all across our businesses.
This year, it is focused on the achievements and quantitative targets in four priority areas, Climate change, gender diversity, frequency rate of accident at work, and anti coercion strain. Also, have now set the date for the ESG investor event that is announced during our full year results. It will be held on the October 5 in the afternoon, most probably in a virtual format. So let's now have a look at Q1 headline numbers. I'm now on slide four.
New orders amounted to €3,400,000,000 at 28% on a reported basis and even up by 31% on an organic basis. As you will see in a minute, this performance was driven by strong commercial dynamics in defense and in space. Sales came to €3,900,000,000 up 1.9% on a marketing basis and up by 0.5% on a reported basis, I. E. Including the negative currency impact.
Trends were quite different in our floor operating segments, and I will explain this in the next few slides. Looking into details at our order intake, I'm now on slide five. So as you can see, the strong reported growth of plus 28% is mostly coming from additional large orders above €100,000,000. So in total in q one twenty twenty one versus only one last year. So two Rafale orders for Greece and France, the new generations of San T, the Franco Italian ground based air defense system.
And on the sealing side, our Indonesian customer, a consortium led by PSN, finalized the financing of SOTRIA, this VHTS satellite designed to provide connectivity to 90,000 schools, 40,000 hospitals, and public buildings across Indonesia. On top of these four contracts above €100,000,000, let me mention that we have also booked the first tranche of the Galileo contract for value that was just below €100,000,000. This contributing to the strong order intake performance in the 10 to €100,000,000 brackets. The remaining part of this project will be booked later during the year for a full value around €750,000,000 in total. Orders below €10,000,000 were of course affected by the pre COVID comps in civil aero.
However, excluding Avionics and IFC, they were actually up 4%. Turning now to slide six, looking at sales goals. As mentioned before, it's really great to see that sales were already back to positive organic growth in Q1. As you remember, the impact of COVID-nineteen was still limited in Q1 twenty twenty, around EUR200 million since disruptions only became really material from mid March twenty twenty. The biggest drivers behind the positive organic growth were twofold.
First, the recovery of sales in space on the back of the commercial successes we we have recorded in 2020, as mentioned earlier. And second, a continuous robust scenario in Defense and Security with double digit organic growth versus the same period of last year. Turning to the geographical perspective, let me just point out that the decline in emerging market sales was driven by the end of some projects like in transport and the consequences of delays at finalizing contracts in The Middle East during 2020. Now looking briefly at each segment one by one. I'm now on slide seven for Aerospace.
Orders were clearly up, as you can see, by 31% organically, thanks to a dynamic start of the year for the Space business. Avionics order were still down as q one twenty twenty was almost a normal quarter for this business until mid March, but the decline was lower than in q three and in Q4 twenty twenty. Sales were only down by 8.7% organically. The drop in aeronautics revenues was still maculous, a little less than 30%, but it was smaller than previous quarters. Importantly, a large part of this decline was offset by the strong recovery of space, with sales up by an impressive 24%.
Turning now to slide eight with Transport. Order intake was up by 66% from €156,000,000 to €259,000,000 thanks to a catch up effect on delays at finalizing contracts in 2020 as well as easy comps. Sales were slightly up, plus 0.5% organically, thanks to growth in our main lines business and despite ongoing travel restrictions, still disrupting progress and some projects. Turning now to slide nine, looking at the Defense and Security segments. Higher order intake, up by 58% versus Q1 twenty twenty was an illustrations of the natural volatility of large contract signatures.
Only one was signed in Q1 twenty twenty versus three in Q1 twenty twenty one. Organic sales growth was also clearly solid, plus 12, so continuing continuing on the very positive trends across most business lines. Among the faster growing areas in the quarter, I can mention surface, whether else, cyber security, and also the naval domain on the back of our recent large successes, such as f one twenty six in Germany, which is by the way in the new official name of MKS one eighty. Also t 31 in The UK are also the second phase of the NMCM project in France and in UK. Turning now to slide 10, looking at our last segment, DIS, digital identity and security.
As mentioned previously, order intake at DIS is structurally aligned with sales for most businesses as they operate on short cycles. Hence, the need for me to commence. At €636,000,000, sales were down by 7.4% on an organic basis. The decrease was mainly due to outcomes in smart cards. As a reminder, we had a peak in smart card sales during h one twenty twenty, which was a bit unexpected and the consequence of the beginning of the pandemic.
In addition, biometrics remain depressed with less demand for passport and border control systems. This weakness will, of course, last as long as transcontinental travel is severely restricted. On the other hand, cybersecurity and IoT showed strong growth close to double digits, which brings me to slide 12, which is just a reminder of our financial objectives. All in all, Q1 is in line with our expectations, which naturally leads us to confirm our financial objective for 2021. So this concludes my brief presentation.
Many thanks for your attentions, and I will now be pleased to take your questions.
Thank you, ladies and gentlemen, and we will now begin the question and answer session. Our first question this morning comes from the line of George Zawo from Bernstein. Please go ahead. Your line is open.
Hi. Good morning, everyone. Just first question, given all the orders you had in space from last year, just what is a sustainable rate of revenue growth for that business this year and in the medium term? And secondly, on the aeronautics, you highlighted smaller revenue and order declines. Is that a function of easier comps, or are you seeing better demand from customers as they look for a ramp up in traffic over the back half of the year?
Okay. Good, good morning, good morning, George. So first on on space, I mean, Joel, I mean, first, I mean, happy with I mean, the profile of order intake and it just started on 2020 with with various swings that that was commented in particular near Cotamycus successes and also some successes last year more on on explorations, once it's a moon moon explorations, I mean, projects. So it it continued as you have seen in Q1 with on top of this VHTS satellites on Indonesia, which has been finally booked in Q1. What I take is more, I mean, the Galileo project that was announced a few weeks ago.
It is the first tranche that we booked in Q1 twenty twenty one, but more to come. And I mentioned that in total for 2021, we expect a level of order intake for Galileo that should be around €750,000,000 So all of that is driving revenue growth. Today, probably a good rule of thumb is to consider that, I mean, single digit, low double digits top line growth for Space in 2021 revenues is probably a good guidance for you guys, considering that it should continue the next years to come. I don't want to say that it's gonna be a big level for the next few years, but what I can confirm is that in a few years, in probably three, four years, I mean, getting a level of revenues that should be around €2,500,000,000 for this business is in addition things that is really at reach. So quite positive on this business.
And the second question was about Aeronautics growth in in the following quarters. I mean, maybe, George, you you want to Yes. If you want to be a bit more clear, I mean, George, on the second question, was was it about a small orders in in Figuero?
Yeah. Like you highlighted, the revenue and order decline was smaller in q one than the prior quarters. I mean, are you seeing sequentially better demand from customers as they look for better traffic in the back half of the year?
Mhmm. No. I mean, it's true that, I mean, q four twenty twenty for for CVIRO was especially low and probably lower than what was anticipated. It was by the way not just an Intel X was seen in all our peers in this industry have been reported Q4 twenty twenty, which was pretty low. Now, we have seen the situation improving little by little in Q1 twenty twenty one.
So overall, I mean, what I've mentioned for Q1, minus 30% against 2020. So sequentially better than the minus 40 that we have reported in Q4 twenty twenty. And what is even more positive is that sequentially, we're seeing particular March, March being better than January and February. So, I mean, we expect this to keep progressing in the next few months now, at which phase at this point, it's clearly a question mark. So sequentially, yes, probably now, I mean, in terms of growth rate at this point, I'm still a bit cautious.
Once again, I mean, this industry, I mean, what I can share with you is probably what our peers have shared with you in the last in the last few few few weeks. We are seeing and in particular, the single body platform at Airbus in terms of the level of demand, pretty much in line with our expectation, a bit above for the aircraft performance in terms of level of demand. And we see in terms of aftermarket and institution in March, slightly better than what we've seen in January and February, so expecting this to continue. Of course, all of that being driven by the progressive, let's say, lift of travel restrictions and which will be, of course, I mean, the key driver for the aftermarket and into region in terms of level of demand.
Great. Thank you.
Thank you.
And your next question comes from the line of Olivier Brochet from Credit Suisse. Please go ahead. Your line is open.
Thank you. Good morning, Pascal. Good morning, Bertrand. I would have two questions. The first one on comments that you've made earlier this morning around semiconductors.
Could you give us a
bit
of color on the impact in Q1 and what you would expect in Q2, Q3 either indirectly through auto production for instance or directly in the production of cards? That's the first question. And the second one is on in Australia, the nuclear submarines. Could you update us on the situation of that program and what we should think going forward, please?
Okay. Good morning, Olivier. So first question about shortage of components. First, I mean, positive thing is that in terms of impact for for q one, quite limited, I mean, almost immaterial in term of miss other miss because of because of that. As as you mentioned, and what I can I can confirm is that at this point, I mean, this has an impact on our digital security business and in particular on on the smart cards, which use of course a number of chips, of course?
So Q1, quite a limited impact even though we have seen these tensions continue and we expect this to continue over Q2, Q3 most likely. I mean, again driven by this temporary shortage and mismatch between order and demand and and and supply. And and despite the fact that we see, I mean, all those fundraise, I mean, investing a lot massively, I guess you have seen in particular the the Taiwanese fundraise, I mean, mean, I mean, think, announced massive investments, but, of course, a lead time, which means that we we know that in situations we'll continue to be putting under tensions for the rest of 2021 at least. Now, it's true that we expect a level of impact that should be a bit more material in Q2 for Smart Card businesses in terms of expansion, a bit more than what we have seen in Q1. Last point, I mean, what we can do from that, that's the point that I've already discussed in previous calls.
We are at PALES, which is quite positive, an internal chips design center capabilities, which makes, I mean, the qualifications of alternative suppliers probably easier than than other other players or industries. And it is what we are starting to do today is really, I mean, to get qualifications of a term active supplier in order to ease this supply. So to make a long story short, so un material effect at this point, a bit more in Q2, but overall situations which is at this point will be well under control, but we need to remain vigilant and of course to keep working hard to have an alternative suppliers being able to bring more production to Thalespinx. Your questions about about Australia. So, I mean, it's it's, I mean, predominantly, I mean, another group.
I mean, of course, I mean, a contract, a large size with the the contributions of a of a quite important phase, which is underway today and another group finalizing this this design. I mean, a step in the design phase of this of this summary. And at this point, negotiating with its its customers and the common rights and in the next phase. And and this should be this should be finalized, I mean, in the next few months. I mean, moving from this with this preliminary design phase to a more detailed design phase, which which should start probably mid mid twenty mid twenty mid twenty one.
Now for for for our catalyst standpoint, I mean, as you know, I mean, we won the most part of the of the sonars of the of the acoustic suite for this for this for this program through our British entities and in particular on what we call the flank areas, which are by far the largest part of this acoustic suite. So I mean, don't expect, I mean, a significant, I mean, one shot and in order intake, I mean, this will spread on various on a few years. But I mean, is quite a significant win for Thales and particular for UK entity. So all of that is really positive.
Pascal, in terms of revenues for this activity in Australia, should we think of it as starting as well in mid twenty twenty one or is it already starting?
Yes, but you said it's gonna I would say not that significant in 2021 and this will grow slightly and progressively into next few years to come. All of that is really, I mean, take it as more as an additional driver for us to deliver on overall mid single digit guidance for this for this for this defense and security business. I mean, you know, mean, some this amount projects for one in Australia. It's really, I mean, a project that in term of a design and build is going to be executed in the next, let's say, probably twenty years. So so so, yeah, of course, I mean, it is positive.
It is extremely positive that that Thales and not just Nara Group, but Thales start of this program. What is for us, I mean, the joint product, which is, I mean, SONAR Suite and in particular on what we call, I mean, flank areas, which are, I mean, the largest component of Sonar Suites for submarine.
Okay. Thank you very much.
Thank you, Olivier.
And the next question comes from the line of Ben Heelan from Bank of America. Please go ahead. Your line is open.
Yes. Morning. Thanks for taking my question, guys. I saw some comments this morning, Pascal, that I think you might have made around strategic review of the portfolio. And obviously, I think we all saw the headlines around potentially disposal of transport.
So can you talk a little bit about that? What has driven you to do a strategic review of assets today? And are there any other businesses that are up for review other than just transport? And then what would be kind of the potential in terms of capital if there are any disposals as a result of a strategic review? Is the aim to kind of reinvest capital and grow?
Or would you be looking at capital return? Because I don't really see the balance sheet as particularly stressed. So any any kind of color around that would be great. Thank you.
Okay. Okay then. Thank you very much for your questions. I mean, what what I think is is really important to say that, I mean, there has been in the past few weeks, mean, some rumors about the potential disposal of our transport divisions. And I was questioned, I mean, yesterday night by journalists about, I mean, rumors.
So I mean, first, mean, what is absolutely obvious is that, I mean, it's not the first time that that was heard about rumors about the future of our of our transport for transport business, and we have never commented any any MMA rumors in the in the past. And, of course, I mean, I'm not going to start commenting about MMA rumors on on any specific business combination scenarios, acquisition, disposal, JVs, partnerships. Now, I mean, when we when we look at our transport business, I mean, mean, we share with you, I mean, what in terms of strategy we have been implementing over the last few few few years, which was which was really going to fold. I mean, first, I mean, a way to improve the quality of project implications and this driving, I mean, a progression of our margin and 2020, despite the COVID restrictions, have reported a level of EBIT margin, which was above 5%, significantly above 2019 and I mentioned that we were targeting and I can confirm of course today that we are targeting a level of margin above 8% in the next few years. Also, I mean, we have seen pretty good successes in term of taking advantage of the introduction of digital technologies in this business and particularly the win of the Stuttgart digitizations of infrastructure in q four twenty twenty.
As, by the way, a pilot of what is going to happen in Germany was probably a good illustrations of of of what we are seeking to do. Now on portfolio management, it it is not something new. Mean, we won at Thales, by the way, as probably many other largest company, we won a yearly strategic exercise in which, of course, I mean, we will view each of our business lines and not just a specific one and each time for each of our business asking ourselves about how to best position those businesses for long terms profitable course. I mean, and and we are driving this year strategic exercise as as as we speak. And once again, it's not something which is new.
This is an exercise that we perform on a yearly basis. And and and this, I mean, doesn't particularly focus on on transport, it applies to each of our business. Now, I mean, it's it's really, I mean, part of, what we do, I mean, at Talos and it is really our jobs as as managers. And and in this strategic exercise, of course, we ask ourselves if M and A opportunities of any any kind of any nature, whether it's partnership, whether it's JVs, whether it's acquisition, disposal, if this can generate more value for our shareholders. So this is basically, I mean, where where where do we stand?
So I don't want to make any more specific comment on this on this point. And, of course, I mean, mean, your question about capital capital use, I mean, no speculation at all, Ben, on this in this in this in this matter.
Okay, great. That's a very clear answer. Thank you.
Thank you. Next question?
The next next question comes from the line of Celine Fornau from UBS. Please go ahead. Your line is Yes.
Good morning, Pascal and good morning, Bertrand. Thanks for taking my questions. I've got a couple of questions. The first one would be regarding the progress that you are doing or you could comment on in aviation regarding your cost base. And because, yes, certainly, maybe there is some sequential improvement in Q1, but the situation seems to be more painful for longer on the wide bodies, which is some of your exposure there.
So if you could give us an update on potentially, you know, the profitability of that business over time and how you're progressing there. And then the second one would be looking at the order intake of Q1, some potential good momentum on Q2. How should we think about cash flow for this year? And, you know, how has it been going, for the first few months of the year? Thank you.
Good morning, Selim. So, first on aeronautics business in terms of cost per day. So as you know, I mean, we have put in place in 2020, I mean, cutting programs in various countries, in particular in US, in Singapore, and also in France. And Singapore and and and US where it was done 2020 with a progressing implementation of this of this programming in France. With you probably have in mind that we have when we presented 2020 figures, we we mentioned our structural cost targets for 2021 versus 2019 with overall, I mean direct cost that should be something one minus 37% down versus 2019, pretty much the same on G and A, a drop in R and D and in sales and marketing that would be more limited, of course, as we need to prepare in the future.
So while white in line with that, it also means that we are going to keep booking also restructuring in H1 twenty twenty one and in particular on our IFE business, which as you know is with a significant exposure on wide body with an increase on industrial base in The US. We are today putting in place and it was anticipated 2020, but with restructuring charge that will be booked in 2021 to go even further in our cost base reductions US, In particular, in our business, where I mean the level exposure to wide body is larger than it is in our top picks, avionic business. So on your second question is on cash flow. So cash flow, I mean, first, I I can reiterate what I share with you for 2021. So overall, a conversions ratio, underlying conversions ratio should be around 95% with, I mean, I have also mentioned that the continuations of reversals of the down payments in our large decent export project.
And I remember that I mentioned about €200,000,000 of headwinds coming from the reversal of down payments on on Rafale and the driving driving us to a level of of of cash of cash flow for the full year that should be around €1,000,000,000. Now it's of course, it's true that any additional well funded export contract will help in delivering figures and the one that delivering even a bit better. But at this point, it's a bit probably a bit too early. And Q1 in term of cash flow, it was pretty good relative to our traditional sequence of cash flow. As you and Salim, I mean, we consume cash in H1 and we generate cash in the second half of the year, so this is a typical profile of cash flow at TALEX.
And what I can share with you in the first three months, our cash flow profile was better than it was a year ago. So I mean, mean, a pretty positive in term of cash flow profile, which, I mean, reflects, I mean, continuous focus on this matter. It's quite obvious. So overall positive, William, giving us confidence on the guidance that we shared with you a few months ago for the full year 2021.
Excellent. Thank you, Bascome.
The next question comes from the line of Andrew Humphrey from Morgan Stanley. Please go ahead. Your line is open.
Hello. Good morning and thank you. A couple of questions from me, please. I wanted to follow-up, first of all, on Transport. I mean looking strategically in that business, you've just been through a period two years of fairly lackluster sales growth.
Clearly budgets at metro operators are pressured at the moment given the low numbers of people who have been taking transport in numbers of markets over the last year or so. How confident would you be that the trading performance of that business reflects its potential long term value would be my kind of follow-up question on that? And the second question relates to aerospace. We've obviously seen a sequential improvement in Q1 versus Q4 and Q3. I wanted to ask how sustainable you see that trend as in IFE and avionics?
And also talk about how if I could ask a kind of related question to that, how have OE and aftermarket businesses within aerospace been during the quarter?
Okay. Good morning, Andrew. So first on the Transport, mean, first, I mean, it's good that the last two years on Transport in terms of the top line was quite soft, but following a period of exceptional growth from 2015 to 2017, 2018, On the back in particular, I've got large size project in various countries. We've then more oppose that doesn't change in this long term view of transport in term of in term of potential for those. I mean, and by the way, it's not just a Thales assessment.
I mean, it's a I mean, type of figure that that this industry is sharing. Overall, I mean, it's a business that where market demand is more around low single digit to a mid single digit depending upon the various segments. Now from the COVID, what we see is that we have seen some kind of decoupling between main lines where we keep seeing quite a strong level of demands, in various countries. And and and behind that, it's really the green transport and the the willingness of many states, many countries to invest more in their overall mainline infrastructure. I mean, quite an obvious, example is Germany, but also UK, for instance.
Example of countries that they they want to invest more on airlines. Urban is a bit is a bit more difficult, and this is where we we need to see, I mean, how will the COVID in the the midterms affect, I mean, the the level of demand for urban way transportations. Now when we look at our business, I mean, Mainland is is much larger than than than Urban. Second points on on aerospace. Overall, I mean, Langfi, I made a comment in particular at Airbus and our delivery to Airbus, which was our deliveries to Airbus was about for the A320 was a bit above 40 aircraft.
It was in my recollection more on average 142 aircraft per per per per month. In the in the first three months of of twenty twenty twenty one. Now in term of in term of sequence, where we see probably as compared to what we have seen in 2020 in particular is probably sequentially an improvement even though at this point still a bit modest in terms of aftermarket for the business. So sequentially better throughout Q1, March being better than February in particular. And this is where, I mean, we're expecting in the next three months to show a still a progressive improvement in terms of demands.
Once again, very much driven by, I mean, the restorations of of traffic, and in particular, I mean, transcontinental traffic. So we know it will take time, it will take time, of course, but sequentially, we expect that in Q2 to be probably better than Q1, even though I guess you get from items that remain of course cautious because all of that is also dependent upon, I mean, how quickly will we see any travel restrictions being lifted.
Okay. Thank you and congratulations on the quarter. Thank
you, Ambro.
The next question comes from the line of Tristan Sampson from BNP Paribas. Please go ahead. Your line is open.
Yes. Good morning, everyone. So it's Christophe, still from Exane BNP Paribas, Soon from BNP Paribas. Yes. So good morning, Pascal and Bertrand.
Three quick ones from my side. First question, can you comment on the progress towards finalizing the Telesat order this year and how the funding package of the project is progressing? Second question is on the situation in The Middle East on civil and military markets where the performance was difficult on both orders and sales in Q1. Can you give us a bit of granularity of what's going on there? Which countries are down, which are the countries that are still supportive?
And do you see any sign of possible recovery there if we leave aside at this stage the offer from Egypt as a one off? And third question would be on the IoT business. Actually, more broadly, on the cyclical activities that are recovering of an inflection in Q1. So you commented on civil aftermarkets doing better sequentially. Is it correct to understand that IoT is also reaccelerating?
And is there any smaller businesses that is also showing a positive inflection that I would be interested in doing?
Okay. Good morning, Tristan. So on on TeleSant, I mean, of course, I mean, these questions should be probably best addressed by by our client, by by Telesat. You know, I mean, this is this is a very large size project. So in total, level of CapEx that should be around $5,000,000,000, of which, I mean, Catalyst and Space, I'm seeing, I want $3,000,000,000.
So this is quite a is quite a a large size project and I mean, it's because of that, it's quite obvious. I mean, that putting together, I mean, a a funding package, of course, it takes it takes a bit of time. It was anticipated. It was absolutely anticipated. And it is, in my view, I mean, moving on in line with with our own with our own expectations.
Now, I mean, we have seen, I mean, a Telesat making significant progress. They have announced a few days ago the fact that's raised 500,000,000 US dollars by way of a new bond offering. They have also announced a funding agreement in in March of the month. Have announced a funding agreement this time with the government of Quebec. And what I think will be quite important for TadeSat in order to put together its overall, I mean, a funding package as, I mean, probably quite an important point of their equity injections will be, I mean, cash that they should get from, I mean, the C band repurposing in The US and in Canada, where, I mean, my understanding that Telesat is expecting quite a significant amount of cash from this C band repurposing matter.
It is progressing. Now when it when will it be will it be completed at this point? It's probably a bit too early for me to share with you, I mean, what should be, I mean, the the the timeline for this same package to to be finalized. I mean, once again, I mean, it's probably a a question that should be bet best advice by TDSAT. As you know, Tristan, I mean, of course, I mean, we are not waiting for this funding package to be completed to start working on this project.
I mean, we signed with with TDSAT an ATP, a solution to proceed, which allow us to progressively ramp up in terms of resources. Of course, I mean, it's not as if this project would be enforced thus being able to work on a full speed basis, but at least, I mean, we take advantage of this period of time, I mean, to start working and to ramp up resources particular, critical resources in order to avoid wasting time. Your point Emiladis, first, maybe in term of in term of revenues and sequence of of revenue, as you know, I mean, we are in twenty twenty one finalizing or completing, I mean, the executions of two large sized projects, one being in Doha, there was one being in Dubai. So that's something that you need to have in mind. Now in terms of level of trends, putting aside as you suggested, I mean, the Egyptians Rafale orders.
We managed to book a quite a large size defense project in one large country in The Middle East. Unfortunately, I cannot be more precise at this point, but which was quite positive and this being in the air defense matter and which was paved the way for future development in these areas. In term of level of demands across those various countries, there's nothing specific country by country that can report to you. I mean, we see a lot of demands from those five countries. I mean, for us in UAE, Saudi Arabia, Qatar are quite important countries for us, but I cannot highlight any specific, I mean, level of demands of matter that should be unique to any of those countries.
And what we see is a lot of demands, now it's more about finalizing decisions and contract awards in those countries where we have seen that it takes probably a bit more time than it was in the past. On the And So to
be clear, in in your mind, there's no change in the in the level of fundamental demand in The Middle East. It's just delays in finalizing contracts right now.
Yes. Absolutely. I mean, the I mean, the I can tell you that the the the level of demand, the level of of request for proposal is quite strong, yeah. Now on businesses where we are seeing a drop in demands in 2020 because of COVID impact, yes, we have mentioned IoT in particular for the automotive market and and it's true, and I I have highlighted this point in my in my presentation that we have seen in q one, a level of demand in IoT, which has which has which has increased quite significantly against last year, which is a positive move and in particular from the automotive but also from the payments markets. So this is really even though it's not that a large size business for Cadet, but it's a positive mode that I need to report.
Where we see still quite sluggish at this point level of demand is more in our biometrics and and and pass through, I mean, production, which is still suffering from from the low demand and here, I mean, me, the key drivers will be, I mean, we will see, I mean, travels resuming, which will drive, of course, I mean, demands in biometrics or broader control programs. And also in term of in term of secure documents, demand in particular passport demands, have been quite depressed. And we we know that will be there will be a rebound. But at this point, it's not that much that it's not that much what we see today. So being a bit a bit patience before seeing a rebound of the secure documents and biometric, I mean, level of demand.
That was very helpful. Thank you, Pascal.
Thank you.
And the last question comes from the line of Christophe Menard from Deutsche Bank. Please go ahead. Your line is open.
Yes. Thank you very much for taking my questions. I had three. The first one is coming back on the chip shortage. You mentioned DIS.
I wanted to understand whether there were any impact on the other divisions because quite honestly, you're using chips in defense, space, and avionics. So whether that that is something we should be looking at in the next quarters. The the second question was on defense and security. You had a a very strong q one in terms of sales growth. I mean, if looking historically, it's probably the second second strongest quarter since q one sixteen.
So I wanted to understand what how we should be looking at the rest of the year in defense and security. I mean, q two should be good because you were at minus 15% in q two last year. So should we be looking at a very strong year in terms of organic growth in defense and security or some kind of slowdown by the end of the year? And the last question is a bit linked to this is on your guidance that you're confirming, the and the sales guidance. Considering the very strong performance in q one, should we be more looking at a narrow range in terms of sales growth?
I mean, it seems that the low end of the the the guidance range in terms of sales is probably achievable I mean, easily achievable in the light of what we've seen in Q1.
Okay. Good morning, Christophe. So on your first question about chips shortage, no, I mean, impact is very much focused on the ISN particular and smart cards. At this point, no specific concern on all the businesses. I mean, it's it's really a question of first level of volumes, which has nothing to do.
I mean, when we talk about smart cards, we are talking about billions of of chips. When we talk about the other businesses, we are not talking about thousands. It has nothing to do in terms of level of demand. And second point, I mean, mean, SmartCards is a short cycle type of business, so very low level of inventories for the defense and the other businesses at Thales. It's more long term project with, of course, the level of inventories which have nothing to do.
So at this point, no specific concern on chip shortage in our other businesses. Second, on Defence and Security, I mean, yes, it's true that Q1 was strong. Now, I mean, as you as you as you all know, I mean, we we we might also have some kind of of cut off from the quarter to the other. So don't don't draw a conclusion for the full year on the basic just on the Q1 figures. Of course, I mean, is positive.
It is giving giving us a good confidence on the full year for this business as well. No. I mean, I'm not changing my view about what what we share with you for our Defense and Security business for the full year, which is my my recollection. Bertrand was around mid mid single digits, something like that in terms of top line growth for our Defense and Security business, which in my view, as as we speak, is is our best assessments and which is which is pretty good. Now and coming to your third questions, yes, it will end.
We made it clear as we released our 2021 guidance for revenues. I mean, the range which was quite large, but also reflecting a number of uncertainties. At this point, probably a bit too early, I mean, to provide you with a more narrow range, that's something that of course we will consider as we release our H1 figures July, which probably hopefully a better view on in particular in travel restrictions and how we will see, I mean, aftermarkets in particular, but and in those various businesses where we suffered quite a lot in 2020 in terms of drop in demands. I mentioned biometric as well. So probably in July, probably we'll have a better view in terms of resumptions of demands and probably a good timing for you to update you on a narrow range in terms of sales guidance for the full year.
This is how I see the situations today. I guess Thank Okay. You very much. Thank you very much, Christophe. I understood it was the the last questions.
Yes. Okay. So so if there's no further questions, maybe even concluding this this call by by stressing that, I mean, q one, that is is very much in line with our expectations. And of course, we remain focused on the delivery of our financial objectives and the execution of our strategy. You have probably noticed that this afternoon, we are holding AGM.
Sadly, I mean, the Paris Air Show will not happen this year, I mean, sadly. It is as it is, but I will participate in several virtual events over the coming months. And of course, I mean, please don't hesitate to reach out Bertrand or Olivier if you have further questions. Thank you very much for your attention. Have a good day.
Bye bye.
Thank you, ladies and gentlemen. And 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 Relation at irthales dot com, and we will get back to you as soon as possible. Thank you all for participation for your participation, and you may now all disconnect.