We are at the Bourget air show in an incredible cockpit with Patrice Caine, the CEO of Thales. Hello, thank you for having us. This is an important moment for you. You have taken half an hour to answer our questions. It is the end of the professional days of the Bourget. We can make a first assessment for Thales. Is it an excellent show? It will be an excellent one?
Absolutely, with an excellent attendance up compared to two years ago. We will break a new record in the number of delegations coming from abroad, from all over the world to see us.
And in terms of orders, how much more compared to the last edition two years ago?
We at the show, we are not here to sign orders, but to move files forward; the purpose of the show is for the aircraft manufacturers to announce orders, but we are involved in the orders that are announced by the aircraft manufacturers. But it is a unique opportunity to reconnect our clients from abroad and move all these files forward. We have the feeling that it is an aeronautics show, but also a rearmament show, a defense show, one could almost say given the geopolitical tensions. There are many politicians: I saw Gabriel Attal, tomorrow Emmanuel Macron, today Sébastien Lecornu, many politicians.
The big question is: you yourself have said all this is very good, the war economy is great, but we don't see the color, there are no public orders. After these 4-5 days of the Bourget, can you say if at last we are seeing public orders?
First of all, this is a defense, aerospace and space show. That is traditional. Our big growth areas are the Middle East, Asia, Southeast Asia, and tomorrow undoubtedly Europe. I say tomorrow because we have had very strong positions taken by the President of the Commission, the commissioners, the various presidents or heads of government. Now, these decisions will be set in motion, probably in 26, but 25 is still a year of transition. Is 2025 a blank year? Not at all. France follows the trajectory of the military programming law. Growth continues in the zones I mentioned and will arrive with the European countries.
So explain to us where we are. We are in a cockpit, we know it because two years ago we were already here. What has changed in fact in two years in this cockpit?
I believe the star of the show, at least for us, is artificial intelligence. We want to show our clients how much AI is not tomorrow, it is today. It is here. We showed about twenty of our products here that incorporate AI, including this connected cockpit which allows the pilot to optimize trajectories in flight in real time, and that requires artificial intelligence.
Will there one day be no pilot in the plane? Before that, what are you doing, for example, in a Rafale to give concrete examples? Where do you intervene?
The Rafale, we do about 25% of its economic value. We make all the sensors: cameras, designation and reconnaissance pods, the forward-looking radar, electronic warfare systems, communication systems.
At the same time, isn't it complicated because Dassault, the manufacturer of the Rafale, is your primary shareholder alongside the state? It is also your primary customer. How do you negotiate with your primary customer who is also your shareholder? Not easy.
It goes very well. When we go for export, between the leader Dassault, Safran, and we all want to win these contracts, so we easily agree.
Are you present in the Israeli-Iran conflict? Not at all. It's only the Americans. At least Thales is not present in that conflict.
We see that the world has never been as unstable since the Second World War with all these military theaters. What does that imply for the strategy you are leading at the head of Thales? First, a very concrete consequence: geopolitics will fuel countries to reinvest in defense and security. That's why we have seen strong growth in the Middle East, Asia, Southeast Asia, which will be complemented by what is happening in Europe.
But is it the war of drones? Because if you don't manufacture drones, you are very present in drones obviously. In what way? Try to explain.
Well, we find what we do in a plane like the Rafale: sensors, data links. On these smaller, more compact platforms, we also provide the command and control system to orchestrate the flight of many drones.
Are we entering a new form of war, very different from previous ones?
In fact, each conflict is different. Each conflict brings different feedback. The one in Ukraine is different from previous ones. The one in the Middle East is also different. It's not that one priority replaces another; each time it complements the palette of potential threats and how to respond.
But you didn't fully answer my question, Patrice Caine: how does this change your strategy based on the lessons of the war in Ukraine and what is observed in the Middle East? Are you going to change your strategies?
It confirms and complements it. It confirms the importance of electronic warfare devices, which are absolutely essential in Ukraine to create an electromagnetic wall that prevents drones from passing. It confirms the importance of air defense, which had been somewhat neglected, and it complements what we said about drones. Airspace protection is very important, increasingly important. I believe it was you who protected the 2024 Olympic Games. That's something. There are foreign delegations coming to ask us about that, among other things.
There is a figure you recently gave: a 600% increase in cyberattacks. That's quite incredible. You made a very important move in 2023 by buying a company called Imperva. Has cybersecurity become a major axis for Thales?
Absolutely. It's one of the pivots we made. First by separating from an activity we thought others would handle better, and then by investing massively in cybersecurity. Today this division has about 2 billion euros in activity. It's significant for Thales, and we chose niches where we are among the best in the world: data security, application security, identity and access security.
There is also a very important point about public orders. Next week there is the summit? That's obviously very important. Do you believe in a defense Europe? I received Marwan Lahoud here earlier who said 'I am a burnt case of defense Europe because I tried, it didn't work.' Do you believe in it today?
First of all, what we can believe in is the fact that Europe is rearming. That is a first answer to defense Europe. It is fundamental that Europe takes itself in hand, rearms, dares to talk about European preference. That is extremely new, even while continuing to buy American products, like the F-35s we saw flying moments ago. That is the decision of nations. But it is no longer a dirty word to talk at European level about minimum European content, even about authority of design that must be positioned in Europe to have access to these European mechanisms. That is a real novelty. Then there are cooperation programs, which are difficult, but I think we must continue to try to make them work.
Today's news: the German company Rheinmetall has opened the doors of European soil to the American company? So we say defense Europe is struggling to progress. Don't you regret it?
It's not really new. European countries already buy a lot from the United States, about 63% I think. So that's not new. The challenge for us, for Thales in particular, is how to win the heart of these new clients in Europe by offering things that Americans don't give them today.
