Hello and welcome to this TV set from Euronaval. Since yesterday and until the end of this show on Thursday, we receive the most eminent personalities of the naval world, whether from armed forces, state institutions, or industry leaders. Today I have the honor of receiving Patrice Caine, Chairman and Chief Executive Officer of Thales. Welcome again.
Thank you. The company Thales needs no introduction, but please tell us a few words to put it in context, especially in today's context.
With great pleasure. First of all, hello, and I'm delighted to be with you this morning. It's first and foremost about defense. We're at the Euronaval show, so it's a great honor. We do about 10 billion in defense, we must be among the top 10 defense groups in the world when you look at rankings by size. But we don't only do defense. We also do aeronautics, one of the largest equipment manufacturers in the world. We do space too, one of the great leaders of space in Europe and on the international stage. And our last pillar is everything related to cyber and digital identity, with a cyber hub that we've built over about ten years, which now generates about 2.2 to 2.3 billion, which constitutes our major group activity. That's the global overview.
So before going into more detail about your new products and what you're presenting at your stand, which is at the entrance of the show, stand I14, what interpretation do you make of the international situation and how does it change your activity and your clients' demands?
It's true that the international situation is quite delicate, let's put it that way. Geopolitics has made its grand return, if I may say, over the past few years, and notably open conflicts, even high-intensity ones, as we say, with what's happening in Ukraine, but not only in Ukraine. Tensions in the Middle East zone, but also Asia-Pacific, which has led virtually all governments to reinvest, for those who had somewhat disinvested, to reinvest strongly in defense. Some countries never let up, I think for example of the Middle East, where you have countries that have constantly invested in defense spending for at least 20 to 30 years. Europe had rather let up, since the fall of the Berlin Wall, to give a somewhat historical date. There was a real turnaround. France was a bit earlier, around 2014-2015, with the Bataclan attacks, when there was a real awareness that security was not something guaranteed forever and that it was necessary to reinvest in security and defense. For European countries, it's rather the war in Ukraine in 2022 that was a somewhat painful wake-up call that defense and security must be among the great 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.
And what do you have to offer? What are you showcasing on your stand to meet these expectations?
First, Euronaval is an opportunity to see all our major clients who come to visit us, major international clients of course, the major French client, but also major international clients, to advance the files and topics. It's first and foremost for me an opportunity for meetings. It's also the 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 both the digital world, where I think we've invested a lot. So it's true, we talk a lot about artificial intelligence. We've accelerated in this area since the beginning of the year with a hub of more than 600 experts across the group, divided into three pillars: people who really look at AI research, notably trusted AI for critical activities related to operational safety, the part applied to decision support systems, and AI in sensors, in detectors, which is a major domain of Thales: sonars, radars, electronic warfare equipment. These are indeed beautiful innovations that we're showing on our stand. And also physics, physical sciences, because our sensors are also physical sciences. For example, we're showing a totally new material called superhydrophobic. That means that if you put water on it, the water bounces back off it. And this is very important, notably for naval forces, because equipment uses small windows, typically for electronic equipment, cameras. But 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, it was still windshield wipers, which wasn't very technological, but it was the best there was. With these new-generation materials, we're going to take a very important step for operational use, with optics that are always clear because the water bounces off and doesn't stick.
There are other areas where you're also ahead, at least in the news, such as mine warfare, for example. And you were already talking two years ago about quantum applications. Can you tell us a bit more about that?
Mine warfare is indeed one of the major areas of naval activity at Thales. We're driven by passion for this domain. There's a major Franco-British program underway to renew mine warfare capabilities for both the Royal Navy and the French Navy. What's characteristic, and it's truly a world first, is that it's totally automated and autonomous. Automated in its mission preparation, so there's artificial intelligence behind it. Autonomous in the drones that will operate far ahead of the fleet, keeping the sailor safe from potentially dangerous zones. So surface drones that will carry, for example, drones that can even be deployed with sonars to map the seabed. There's AI in the sensors themselves, typically in the sonar, to automate — it's more than automate, to make intelligent — the detection and potential classification of mines. Of course, the human remains in the loop, as we say in defense, to then do the final identification. And this system also keeps the sailor safe by sending all these assets far ahead autonomously to clear dangerous areas, whether far from us or closer, like the Brest harbor when submarines go on patrol, it's important to clear it. And mine warfare plays an absolutely key role there.
