PARIS (Reuters) - Europe’s largest defence electronics group, Thales (TCFP.PA), predicted operating profit would grow 5-8 percent in 2013 on the back of stable sales, as growth in its civil business and emerging markets offsets weakness in defence.
Earnings before interest and tax rose 24 percent to 927 million euros ($1.21 billion) in 2012, beating the average estimate in a Thomson Reuters I/B/E/S analyst poll of 845 million euros.
“Despite the continuing unfavourable economic environment in Europe, the group is anticipating a slight upturn in orders in 2013, largely due to the expected performance in the emerging countries,” Thales said.
The group in December replaced its chief executive, who lost the support of its top shareholders - the French state and Rafale fighter jet maker Dassault Aviation (AVMD.PA) - after struggling to catch up with the margins of industry rivals.
New CEO Jean-Bernard Levy, the former head of media group Vivendi (VIV.PA), told analysts on Thursday that the company could improve margins and had “good growth potential”.
“We have to do better on two major fronts: profitability and international growth,” Levy said.
Sales should remain stable, with growth in civil activities offsetting a “less favourable situation” in defence, Thales said.
The group’s civil business includes cockpit systems and in-flight entertainment panels for airliners, and railway signalling.
Thales is also targeting growth in emerging markets as defence budgets are squeezed in mature countries.
Thales said new orders rose 1 percent to 13.29 billion euros last year, including additional Bushmaster armoured vehicles in Australia, rail signalling contracts in Denmark, in-flight entertainment systems for a major North American airline, and upgrade and maintenance contracts for the French Navy.
Revenue rose 9 percent to 14.2 billion euros, ahead of the poll average of 13.82 billion euros.
($1 = 0.7649 euros)
Reporting by James Regan; Editing by Elaine Hardcastle; Editing by Lionel Laurent