DAY 2 - INTERVIEW - Patrice CAINE, CEO of THALES

With great pleasure. First, good morning, and I am delighted to be with you this morning. It is first and foremost defense; we are at the naval show, so first and foremost. We do about 10 billion in defense, and we must be among the top 10 largest defense groups in the world when you look at the rankings by size. But we don't just do defense; we also do aeronautics, one of the largest aeronautical equipment manufacturers in the world. We also do space, a major leader in space in Europe and internationally. And our last pillar is everything related to cyber and digital identity, with a cyber hub we have built over the last ten years, which now accounts for more than 2 billion, 2.3 billion, and constitutes our group's major activity. That is the overall picture.

Ah, it's true that the international activity, or rather current events, is quite delicate, let's say. Geopolitics has made a major comeback in recent years, especially the conflicts, open conflicts, even high-intensity conflicts as we say with what is happening in Ukraine, but not only in Ukraine. Tensions in the Middle East, but also in Asia-Pacific. This has led almost all governments to reinvest, for those who had disinvested a bit, to reinvest heavily in defense. Some countries never let up, for example the Middle East, countries that have constantly invested in defense spending for at least 20 or 30 years. Europe had rather taken its foot off the gas since the fall of the Berlin Wall, to give a historical date. There has been a real turnaround. France was a bit earlier, around 2014-2015 with the Bataclan attacks, which was a wake-up call that security was not guaranteed forever and that it was necessary to reinvest in security and defense. For European countries, it was rather the war in Ukraine in 2022 that was a painful awakening that defense and security must be among the main priorities of these governments. And it's true that since the last Euronaval show, things have not improved in terms of geopolitical tension, and governments are investing more and more in their security and defense.

First of all, Euronaval is an opportunity to meet all our major customers who come to see us, major international customers, of course the major French customer, but major international customers, to move files forward, to advance topics. It is first of all a chance for meetings. Of course, it is also an opportunity to show our latest innovations, our latest products, our latest equipment and systems. Among the innovations, we like to talk about technology at Thales; it's something that characterizes us well. We like to combine the digital world, where I think we have invested a lot, so we talk a lot about artificial intelligence. We have accelerated in this area since the beginning of the year with a hub of more than 600 experts at the group level, divided into three pillars: people who look at AI research, especially trustworthy AI for critical activities for safety; the part applied to decision support systems; and AI in sensors, which is a major area for Thales: sonars, radars, electronic warfare equipment. These are indeed great innovations we show on our stand. And also physics, physical sciences, because our sensors are also physical sciences. For example, we show a completely new material called superhydrophobic. It means that if you put water on it, the water repels, bounces off. And this is very important for the navies because equipment uses small windows for optronic equipment, cameras. At sea, there can be salt fog, rain, spray, and keeping the optics always clean and clear is a real challenge. A few years ago, there were still wiper blades, not very technological, but it was the best available. With these new generation materials, we will take a very important step operationally with optics that are always clear because water bounces off and does not adhere.