French defence group Thales EURONEXT:HO said on Friday it would book an exceptional charge of about €450 million ($514.58 million) in the first half of 2026 after scrapped the F126 frigate programme, while raising its 2026 order intake and cash generation targets for the year.
Thales said the mostly non-cash charge would reduce group net profit by about €350 million but would not affect adjusted earnings before interest and taxes (EBIT), adjusted net income or have a material impact on operating free cash flow.
It added that it would seek compensation for work already carried out and damages linked to the cancellation.
The group said the programme's termination would have a limited impact on revenue of around 0.5% in 2026 and less than 1% annually thereafter and a marginally positive effect on adjusted EBIT margin.
It now expects a book-to-bill ratio above 1.10, versus 1.0 previously, and cash conversion of 100%-110%, up from 95%-100%, while confirming 2026 organic sales growth and adjusted EBIT margin targets.
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