French group Thales targets profit margin of up to 12% by 2023

PARIS, Oct 3 (Reuters) - Thales is targeting an operating profit margin of 11.5%-12% by 2023 following its recent acquisition of chipmaker Gemalto, the defence company said on Thursday ahead of an investor day.

Thales also forecast annual organic sales growth of 3-5% on average up to 2023 as the integration of Gemalto is expected to offset what it sees as a more “uncertain outlook” in the commercial space market.

Thales, which acquired security software company Gemalto in April for 4.8 billion euros ($5.26 billion), recorded sales of 15.6 billion euros last year. Its operating margin stood at 10.6%.

The group’s chief executive Patrice Caine told reporters that the integration of Gemalto was likely to bring 300-500 million euros of additional revenue by 2023.

He added there was a “significantly higher potential thereafter” on the back of sustained demand for transport and security products, for which Gemalto’s technologies were expected to complement those of Thales.

$1 = 0.9125 euros Reporting by Benoit Van Overstraeten; Editing by Sudip Kar-Gupta/Matthias Blamont