Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Thales Q3 2023 Results Conference Call. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. I must advise you that this conference is being recorded today. I would now like to turn the conference over to Alexandra Boucheron, VP, Head of Investor Relations. Please go ahead. Good morning, welcome and thank you for joining us for the presentation of Thales' nine-month 2023 order intake and sales. I'm Alexandra Boucheron, the Head of Investor Relations at Thales. With me today, Pascal Bouchiat, CFO of Thales. This presentation is audio webcast live on our website at thalesgroup.com, where the slides and the press release are also available for download. A replay of the call will be available in a few hours. With that, I would like to hand over the call to Pascal Bouchiat. Thank you, Alexandra, and good morning, everyone. So as usual, to start these presentations, I wanted to highlight a few key messages. I'm now on slide two. First, I will start with a few words on our recent dynamisms in terms of portfolio management. We have been quite active, both in the first half and during the third quarter of 2023, and I wanted to come back in particular on the acquisition of Imperva that was announced at the end of July. Imperva is a leading U.S.-based data and application cybersecurity company with an enterprise value of $3.6 billion, which makes it one of the largest acquisitions conducted by Thales after Gemalto. With this acquisition, Thales is taking its cybersecurity business to the next level. These acquisitions represent a rare opportunity for us to create a world-class leader in premium cybersecurity products, enabling growth in data security and Thales' entry into the attractive application security markets. So clearly, we are excited about this new step in Thales' development in this fast-growing market, and we are very satisfied that it has been well received by our shareholders, who also saw the potential for value creation, thanks to significant synergies. Of course, we have been working on getting all the various regulatory approvals that we need, and it is progressing well to ensure closing early 2024. As you can see on the slides, we were also happy to confirm the closing of two deals: the acquisition of Tesserent, an Australian cybersecurity service business, and also the disposal of the electrical system business to Safran. A last word on portfolio management. Even though it has been longer than anticipated, good progress was made again regarding the transport business disposal, and we welcome the decision from yesterday, where the European Commission has approved the acquisition. Of course, Thales remains fully committed with Hitachi Rail to finalize this transaction in the first half of calendar year 2024. As you can see, there is also two additional positive news that I wanted to highlight. First, we are very proud to be part of the CAC SBT 1.5 Degrees Index, demonstrating the recognition of our ESG strategy. Last point, we already presented you that graph during Q1 earnings calls, as it was a proposition submitted by the French Ministry of Defense to the Parliament. The budget for the period from 2024 to 2030 has now been voted and approved, which is, of course, positive for Thales, as France represents 40% of our defense base and is our lead customer and source of innovations funding. This budget incorporates significant investments in new domains of confrontations such as cyberspace, space or drones, in which Thales has strong positions. So, turning now to slide three, which summarizes our key figures for the first nine months and the third quarter of the year. As you can see on the slide, the total order intake at the end of September was down by 18% versus Q3 2022, as we booked the Jumbo Rafale UAE contract in Q2 2022. Order intake came down by 6% organically in Q3, but again, versus a very strong +36% organic growth in Q3 2022. Sales over nine months were up by 7.5% organically, supported by an organic growth of 7.2% in Q3 that I will comment on in a minute. I'm now on slide four, looking into details at our order intake. As mentioned, Q3 came slightly below strong Q3 2022. However, the commercial activity remained strong during the third quarter, with three additional large orders booked, two in defense and one in space. Also, please keep in mind that order intake on a quarterly basis can be pretty volatile due to large contracts. The second tranche of Rafale in Indonesia is a good illustration. We were working on the finalization of the contract, and due to the IFRS rules, it will be booked only in Q4 2023. Looking at the chart by unit value now, it's worth noting that small and medium orders continue to progress over the periods, with small orders even up 8% organically. Turning now to slide five, looking at sales growth. First, a word on the currency impact, as you can see, Q3 was again negative at -EUR 103 million, reaching a total of -EUR 183 million over nine months. We expect the trend to continue to be negative over Q4, to land at around -EUR 250 million for the full year. In terms of scope, there is also a significant impact to model over the full year 2023, resulting from the acquisitions and transfer of activities carried out in 2022 and 2023. I already gave you all the details during the H1 earnings calls, so allow me to refer you to our IR team if you need more information on the subject. Now, over nine months, organic sales growth stands at 7.5%, mostly driven by, firstly, aerospace, confirming a double-digit type of organic growth, clearly driven by the avionics part of the business. Secondly, a continuous robust scenario in defense and security as expected. And thirdly, the ongoing strong sales momentum in DIS outside of the smart cards business, and I will come back on that point in a few slides. Turning to the geographical perspective, let me point out that growth was particularly strong in mature markets, and especially in France, the U.K., and all the rest of Europe. Now, looking briefly at each segment, one by one. I'm now on slide six for aerospace. Orders at EUR 3.4 billion were down by 7% organically due to high comps in both businesses. In space, while we booked five large contracts again over the first nine months, their total volume was lower than the total volume of the five telco contracts booked during the same period of last year. Civil aero business continued to be quite dynamic, with a double-digit organic growth, despite one large order booked in Q3 last year in IFE. Sales at EUR 3.6 billion were strongly up by 10.9% organically, clearly driven by the robust growth in aeronautics, up at a double-digit organic growth in both OE and aftermarket activities over nine months and also at Q3. The space business remain impacted by supply chain challenges during Q3, especially in mechanical parts, and the situation is expected to continue in Q4, likely leading to a flattish organic growth versus full year 2022 sales for the space business. However, thanks to the good dynamic in avionics, we are confident that the segments will achieve a high single digit type of organic growth over the full years 2023, as indicated already in the past. Turning now to slide seven, looking at the defense and security segments. Order intake amounted to EUR 6.5 billion, down by 29% organically versus a very strong nine months in 2022, as I mentioned before. Two new large orders, above EUR 100 million, were booked in Q3, for a total of seven in nine months. At EUR 31 billion at the end of September, our backlog represents 3.4 years of sales.... Sales amounted to EUR 6.8 billion, up by 6.2% organically versus 2022, with several business lines reaching a double-digit type of organic growth over the period, like electronic combat solutions, network and infrastructure system, and cyber defense solutions. This is just to give you a few examples. Q3 confirms the strong dynamics of the segments, up 8.1% organically versus the same period of last year. However, an important point here, as you know, our defense business is subject to phasing effects, and I wanted to highlight that the strong, high single digits third quarter, does not mean that you should expect the same trends over Q4. Looking back at last year's sequence between Q3 and Q4 in defense is a good example. We released 8% organic growth over Q3. That then decelerated to 1% over Q4. Thanks to this solid organic growth over nine months, we confirm our ability to deliver the mid-single digit organic growth we committed to for these segments over the full year 2023. And finally, digital identity and security. I'm now on slide eight. So at EUR 2.4 billion, sales were up by 6.9%, organically over nine months. When we look back on a quarterly basis, different dynamics in terms of organic growth emerge. A very strong Q1 at 20.1%, a softer Q2 at +4.7%, and a slightly negative Q3 at -1.5%. This significant slowdown in growth over nine months was in line with the guidance I gave during the H1 earnings calls. It was driven by the lower demands and lower price effects on smart cards, turning to a organic drop in Q3 after an exceptional performance during most of 2022 and Q1 2023. It's also important to note that apart from these smart card activities, the rest of the business within the DIS continue to perform well, almost balancing the smart card decrease with the double-digit organic growth over Q3. We anticipate that over Q4, smart cards should remain clearly negative in terms of organic growth versus high comps in Q4 2022, resulting from the DIS segments into another slightly negative organic growth. Which brings me to the final slide. So slide nine on our 2023 financial objectives. As you understood, Q3 order intake was in line with our expectation, and we have a solid pipeline of orders for Q4, which allow us to confirm our full year order intake target, namely a book-to-bill ratio above one. Our sales dynamics remain strong, despite some headwinds in space on the smart card business within the DIS. But all together, we confirm our +5% to +7% organic growth guidance range, and no change to our EBIT margin guidance between 11.5% and 11.8%. Many thanks again for your attentions, and I will now be pleased to take your questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one and one on your telephone and wait for your name to be announced. Once again, it's star one and one on your telephone to ask a question and wait for your name to be announced. If you could please kindly limit yourself to two questions only, so that everyone is given the opportunity to ask their questions. Thank you. Once again, ladies and gentlemen, please press star one and one on your telephone and wait for your name to be announced, and please kindly limit yourself to two questions only, so that everyone is given the opportunity to ask their questions. Thank you. We are now going to proceed with our first question. The questions come from the line of Olivier Brochet from Redburn. Please go ahead with your question. Yes, good morning. Thank you for taking my question. Good morning, Alexandra. Good morning, Pascal. So two questions then. First one on the space summit in Seville next month. Yeah, next month. What are your expectations there, if you could provide us with some elements? And the second question is also on space. The CEO of Leonardo made the comment about the Space Alliance and changes to the shareholder agreement. Is there anything material that we should be aware of regarding that, please? Thank you. Okay. Good morning. Good morning, Olivier. So on the Seville space summit, I don't have very specific information on this matter, so I mean, I don't expect any specific news on this matter as compared to, I mean, the previous summit on this matter. On Leonardo, and I guess you might be referring to, if I understand well, to some comments from a new CEO from Leonardo. I think, I mean, most of the comments were about making sure that both Thales Alenia Space and Telespazio can work even better together. So in my view, it's more about a willingness, I mean, to have, I mean, those two companies working together and taking more businesses with a clear will of good collaborations between Leonardo and Thales on this matter. I don't, I don't expect anything more than this matter. So, I mean, for me, it's quite positive, and maybe you have heard about... It's a bit far, of course, a bit, for me, a bit difficult to comment on the on Mr. Cingolani comments, but we noticed that he mentioned space as a priority for Leonardo in terms of investments. So of course, I mean, as a commander of the Space Alliance between Thales and Leonardo, we do welcome this commitment from Leonardo, I mean, to keep investing on this activity. There is nothing more, I mean, I can comment on this matter, Olivier. Yep. That's very clear. Thank you very much. Thank you. Thank you. We are now going to take our next question. The question comes from the line of Ross Law from Morgan Stanley. Please ask your question. Hi. Good morning, everyone. Thanks for taking my question. Just firstly, on orders, clearly the Q3 outturn came in below what we're expecting, and you've flagged the slippage of the Indonesia Rafale second tranche. But even if we sort of add back an assumption for this order value back into the quarter, order intake probably still would have come up short versus expectations. So just looking to understand whether there's anything else material in the quarter that slipped. And second question, just on sales. Clearly you flagged nine months organic growth rates, the 7.5%, which is ahead of the 5%-7% full-year guide. Even with a potential slowdown in DNS, is there any reason why the other businesses shouldn't maintain the current growth rate going into the fourth quarter? I include, of course, avionics in that as well. Thanks. Okay. Thank you very much for your two questions, Ross. First, I mean, on order intake, I mean, you probably remember that, probably at each quarterly call, I keep saying is that, looking at order intake at Thales on a quarterly basis is not that relevant because, I mean, our order intake, and I guess this is probably the case for many companies like Thales, order intake can be, can be quite bumpy when you look at quarterly figures. So yes, I mean, I mentioned about the booking of the Rafale in Indonesia, that we will be booking in Q4. Now, for me, what is more important, and what I can share with you, is about my confidence with regard, I mean, the full year 2023, in term of overall order intake, and probably, for me to, to reiterate the fact that, when I look at the consensus, as it stands today, with regard, I mean, the full year of 2023, I'm comfortable. So no specific matter of concern on this, on this matter. It's really about, I mean, a cutoff or, I mean, move between Q3 and Q4. As you know, and this is basically what happened at a company like Thales when we look at the past, the fact that a number of customers, number of contracts are finalized in Q4. So we are about finalizing several pretty significant contracts that we should be able to book in Q4 2023. So no concern at all about, I mean, this level of order intake in Q3. Second points on sales, 7.5 persons. So that's probably, I mean, two points that I could... Two or three points that I could mention to you. I mean, to give you probably a better view on how we see, I mean, the landing for 2023. First, I mean, what I mentioned on the DIS, and it's true that we expect the DIS to remain negative in terms of organic growth in Q4, as compared to last year. And my view is that this negative growth in Q4 will be more important in a negative way as compared to what happened in Q3. So it should be below 1.5% negative. Second point, defense and space has been pretty strong. Above our guidance when you look at the end of September figures, a bit above 6%. We keep seeing that, we see more defense and security at, more probably around 5% for the mixing energies for the full year. And I mentioned that, here again, when we look back at the past, in general, we see Q4 for defense and security to be softer in terms of organic growth, as compared to the situations on the first nine months of the year. This is what happened in 2022, in particular. And I can imagine that this will happen again in 2023. On the aerospace segments, I guess that you have seen that, with overall 11% revenue growth end of September, we are above our guidance and probably a bit of cautiousness on this matter. So when you put all of that together, I mean, this +5%-+7% is today once again my best view on how we should be landing. Thanks very much for all the detail. Very helpful. Thank you. We are now going to proceed with our next question. The question come from the line of Ben Heelan from Bank of America. Please ask your question. Yeah. Thank you. Morning, Pascal. Hope you are well. I wanted to come back first on this point around space and Leonardo because I believe the CEO of Leonardo was a bit more explicit than that. There was articles on Bloomberg that he said that you had actually changed the shareholder agreements around space around the space JV, so I wanted to put that to you. Have you actually seen those and changed those shareholder agreements? That would be the first one. Secondly, can we talk about civil, and can you help us understand a little bit avionics growth on the aftermarket in the third quarter, and how you're seeing things in the IFE business? And then just finally on defense, it's obviously you're talking about a quite strong slowdown. I know you said that you usually do have a slowdown in Q4, but is there anything in particular from a saving perspective? Is there any particular programs that we need to be aware that are slower in the fourth quarter? Thank you. Mm-hmm. Okay. Good morning, Ben. So, I mean, with regard your first questions, we have not changed the shareholder agreements relating to the space alliance. On your second questions about avionics, I mean, Q3 has been especially strong on aftermarket. By the way, pretty much in line with what we have seen since the beginning of 2023. So really, I mean, a very strong growth, organic growth on aftermarket with a level of demand that has been above our expectations. Let's be clear about this matter. On IFE, yes, I mean, we bounce, which is more modest than the rebounds that I've just mentioned on the aftermarket. These rebounds on IFE are, illustrating or reflecting the fact that, as you know, I mean, we started to book new orders, mid-2022. You probably remember, and it was part of my comments in my presentations, in Q3 last year, we booked, quite a large order, a new large order for, for IFE, in Q4 last year as well. And, we see also a level of demands, which is overall, going the right directions, for IFE. Now, as here we're talking about a more, significant, a project in term of size. Of course, it takes a bit of times, to flow them down in our P&L, in term of, a growth on our revenue line. So hence, the fact that there's a bit of a delay in recognition of higher revenues for IFE. But overall, the direction on IFE is positive. But of course, as we all know from a reference level, which was last year, extremely low. So overall, I mean, very strong demand in aftermarket, continuing in Q3 on IFE. The first rebounds are coming from large orders that we booked in the last 12 months... but a bit of time to have since that been reflected in our revenue lines. Defense and security, it's more overall, I mean, facing matters and there's not a specific business line or product lines that I could mention in terms of fading between Q3 and Q4. It's overall the fact that after quite a strong Q3, which was about a bit above our expectations, I think that Q4, relative to Q4 last year, will be probably less positive. It will be positive of course, but probably bit less positive than what we have seen in Q3. But again, no specific matter or concern in terms of level of growth. Okay. Okay, super clear. Thanks, Pascal. Thank you, Ben. Thank you. We are now going to proceed with our next question, and it comes from the line of George Zhao from Bernstein. Please ask your question. Yes. Hi, good morning, everyone. First, on space again, you know, back at H1 earnings, you talked about, you know, supply chain challenges, especially the hardware, you know, improving progressively in H2. So just wondering if you'd be seeing any notable improvements so far? And with this year expected to be flat, I mean, are we still on track to get to this EUR 2.4 billion-EUR 2.5 billion of revenue, you know, you know, next year, as that would require, like, a double-digit growth, at the low end. And second question on the, smart cards, I think the volume decline, I think that's been well flagged, but could you just give some color around the competitive headwind that you called out in the press release? Thanks. Mm-hmm. Yes, so good morning, George. So, so on space, the supply chain, no, yes, I mean, I was expecting probably a bit of relief in terms of supply chain in H2, which is not happening. I mean, we keep facing some difficulties on this, on this matter, on some, in particular, some critical parts, mechanical parts in particular. So we keep working very actively on this, on this matter, but yes, it's a challenge that we're facing. So overall, I mean, the 2.4 that you mentioned, in my view today, will be a challenge. Let's be clear about this fact. But which shows that, when I look at, the overall aerospace segments, it shows that we're facing this challenge on the, on space. On the other side, I mean, I guess it was quite obvious that, the avionics business is outperforming in terms of, in terms of growth. So now looking, looking at the, I mean, the, the full scope of the aerospace segments, you see that despite, I mean, those headwinds in terms of supply chain on, on space, today, looking at the overall, organic growth for the, for the segments, over the nine months of 2023, we are above, our guidance. The, the guidance was high single digits. We are close to 11% end of September, which shows that it's true that the outperformance on avionics is more than compensating. I mean, those are difficulties that we see on space. Smart cards, your question was about- Ah, yes. I mean, yes, headwinds on smart cards. Yes, more than talking about headwind, it's more about probably a bit more normalizations of the situations on the—in particular, on the telco side, on the telco side. Where, I mean, in 2022 and the first half of 2023, we kept benefiting from the overall shortage of semiconductors, which of course drove a significant price increases. And this also until the beginning of 2023, with a level of demand that was pretty, pretty strong. Now we see, I mean—and once again, it's not, it's not a surprise. I mean, this is what I kept mentioning over, I mean, our last calls. We see, and in particular, driven by this overall softness of the smartphones segments, we see, I mean, drop in terms of volumes. Less sales of smartphones means less SIM cards for our business, and this combined with a relief in terms of semiconductor availability, which, of course, weigh in terms of prices. On this matter, what we do overall at Thales, and this is basically our policy, we preserve our margin. Our margin remain very strong on the smart cards, in particular on the telco side. Which also means that we might decide not to follow some pricing pressure. On some specific market, in particular on some countries in Asia. Once again, George, what I think is quite important for me to say is that it's really something that we have anticipated, and all of that is consistent with both the overall revenue guidance that we mentioned, around mid-single digit for the full year. And also, I mean, what I've mentioned in term of the overall profitability EBIT margin for the full year with this 13.5%-14.5% range. And I keep saying, as I did at our last calls, that I'm expecting the DIS to land at a level of EBIT margin that would be probably more at the upper part of this range. Very clear. Thank you. Thank you. We are now going to proceed with our next question, and it's from the line of Hervé Drouet from CIC Market Solutions. Please ask your question. Yes, good morning, Pascal. Good morning, Alexandra. Two questions as well on my side on DIS. Would it be possible, if you can, a bit more specific on the dynamics on the volume and price for smart cards? Are we talking here about mid single digit decline, and how much of that is volume, maybe pro rata versus price? And the second question is, how much eSIM card is or could potentially impact sales? And could it explain as well, potentially how it help in maintaining good margins for smart cards? Thank you. Yes, good morning, Hervé. On your second questions, I mean, at this point, I mean, the development of the eSIM is not large enough, I mean, to compensate any specific move from a price or volume standpoint on the overall segments of SIM for Thales overall, huh? So, I mean, it's not the evolutions of the eSIM that could drive in the short terms any specific impact on the overall revenue and profitability of this telco segments. So now, in terms of pricing, volumes will be a bit difficult, but overall, I mean, what we see in this overall segments, the telco segments, is a drop in terms of revenue against the same period of last year of a double-digit drop overall in terms of revenue. And I don't have in mind, I mean, a specific split between volumes and and price, but I mean, as a rule of thumb, I could say that probably should be, I mean, 50/50, something like that. So, I mean, it's both a drop in volumes and a drop in prices. Now, and this is more important, against very high level of both volumes and prices last year. So, and today, I mean, overall, a level of profitability, which is very strong. All right. Yes, that's clear. Thank you very much. Thank you. We are now going to take our next question, and it's from the line of, Christophe Menard from Deutsche Bank. Please ask your question. Yes, good morning. Thank you very much for taking my question. I had two actually on, well, actually three. Two on space and one on defense. On space, I was wondering whether the lack of launches from the European launchers had had some effect on your sales. And should we expect some sort of catch up when that launch capability is back on track, I would say? And the second question related to space is whether the weakness we're seeing in space has any implication on your component division? That's for the... I think it's more into mechanical parts in space as well. And the third question is on defense. I heard what you said on Q4, but is there any, I would say, pressure or incentive by your clients to accelerate the milestone passing on some defense programs, given the environment? So should we expect some kind of tailwind, so to say, in Q4? I mean, from your message, it is not the case, but are you seeing any trend from governments on milestones? Clients, sorry, not governments. Well understood, Olivier, on your first and hello? Christophe. Christophe, sorry. Sorry, Christophe. Sorry. So on your first and third questions, it was clear. On second one, you will need to come back and to explain a bit more what you expect. So first, on lack of launches, no, I mean, no specific impact. So I mean, our clients use at this point in particular, I mean, SpaceX. So, I don't see any impact at this point, and in the next few months, I mean, coming from the lack of launchers. So, no. Your second question, component division, but I'm not sure that I got it. No. Yeah, it was—I mean, in my understanding, the component division within aerospace manufacturers, some components for space applications, so antennas and all that- Mm-hmm. thing. And in my understanding, that has been linked. I mean, the demand- Yeah for components has been linked to how space was behaving. So should we expect some sort of a flatish development of sales, and similar impact on margin or any indication here? No, but maybe you might be referring to our electronic tubes business, which is reporting these segments. Yes, exactly. Ah, yes. Okay. Which is also directly to space, where, by the way, we see, I mean, some also, I mean, some slowdown. It's this time it's not that much from a supply chain, I mean, specific difficulties. It's more of the fact that this business can be a bit, a bit bumpy. So at this point, it's more soft. It's not, as you know, it's not reported in our space business. It is reported in our avionics business, I mean, there are various end-user applications. But, I mean, part of the market is space, but it's more a bit more volatile type of business, but no specific concern in term of supply chain, specifically on this matter. Defense. So defense, yes, I mean, I mean, the more we could accelerate the better it could be, and it's true that we've got some clients asking once again for us to keep ramping up overall production output. So, I mean, the more we could deliver the more our customers would be happy. And this is also, I mean, what we have done since the beginning of the year. I mean, overall, I mean, we're a bit ahead of our own, our own guidance and expectations overall, in terms of production delivery to our customers when you look at the situation end of end of September with a bit more than 6% organic growth. Now, I'm still a bit cautious because Q4 is here again, a strong quarter in terms of absolute level of revenue for defense and security. So Q4 is the busiest or the largest quarter in terms of revenue. Q4 last year was already strong. Today it's more about ability to keep ramping up our production output, I mean, to meet demand from our customers. But yes, I mean, you're absolutely right. In case we would be able to pass milestone even quicker, it could be a, it could be a tailwind. Now, once again, as I mentioned, we have a lot of activity on defense and security at this point, and it's more about us being able to keep accelerating on this, on this overall production output. Thank you. Very, very clear. Thank you very much. Thank you. We are now going to take our next question. It's from the line of David Perry from JP Morgan. Please ask your question. Yes. Hi, good morning, Pascal. I've got two questions, if I may please, but slightly off topic, but I think they're important. The first one, just on aerospace. The IR team send out the very helpful consensus to us just before the results. And the EBIT number for 2024 looks very high to me. It's north of 500. I'm quite a bit below 500. So just wondered if you... I know it's not a guidance call, but if you can just comment on the level of progress you think you might make in 2024 in aerospace. I have a lot of questions already. The other one is, I'm struggling a little bit to model your financial result. There's so many moving parts with disposal positions, different interest rates today, of course, than in the past. Could you just help us think about that a little bit? That would be great. Thank you. Okay. Thank you very much for your two questions, David. As always, two very precise questions. So, you would like me to start commenting 2024 for aerospace? It's probably a bit too early. I guess it was quite obvious from my comments that we are today outperforming on the avionics business. On the other side, it's true that the situation in space is probably a bit more difficult than anticipated. I mentioned, I mean, those supply chain challenges that we're facing on space.... So my view is that, I mean, the figure that you mentioned, which is, yes, I mean, today the consensus for aerospace in 2024, overall it means that we need to fix those challenges that I mentioned on, on space. I think it's quite, it's quite obvious. And second point, it's- it will be also quite important to track how, I mean, the overall level of demands on a- avionics, on civil, aerospace, will continue to, to unfold in 2024. Second point is, on, on financial, expenses on our P&L. So as you can imagine, I mean, in a, in a call like that, I mean, explaining all the details of this line, could be quite a challenge for me. It could take a bit of time because there are a number of moving parts. But I could give you, I mean, just a very simple explanations. And of course, I mean, you can spend more time with the IR team on this matter if you want to dig a bit, dig a bit more. You probably remember that in H1, I mean, we report in a financial expenses line on our P&L that was around zero. And my view is that for the full year, 2023, it should be this line should be around around zero. So meaning that, I mean, the returns on our cash will compensate, I mean, the overall cost of our financial resources. Now, overall, and just as a very rough figures, we have announced a level of acquisitions which is close, which is close to overall $5 billion, EUR 5 billion. So, I think that overall, from this zero level of financial expenses in 2020, in 2023, we need to add, I mean, something like $5 billion of overall, I mean, level of debts. And overall, a net cost of the additional level of debt in terms of, in terms of cost of funding, probably something like 3.7%-3.8%. So when you put all of that together, it's probably a level of financial expenses that should be probably something like EUR 180-200 million, it's probably a good rule of thumb. Now, of course, it will also... There will be some other moving parts, in particular, the exact closing date for the disposal of our transport business. But overall, I mean, to make a long story short, you probably need to consider that overall EUR 180-200 million, maybe 200 million, including also the impact of IFRS 16, that you shouldn't forget in your overall modeling. I think it's probably a good rule of thumb. Now, again, David, if you want to deepen your analysis, you can get back to the IR team. No, that's super helpful. Appreciate it. Can I just throw in a cheeky third question? Please. Please. How are you doing with the pension discussions? You making progress there? Yes. I mean, we keep making progress on this matter. And we are negotiating with a preferred potential partner on this matter. And all of that consistent with what I mentioned at our various discussions over the last few months. With, I mean, the decisions that we'll be making before the end of 2023. So, it should come up in the next few weeks. Okay. Thank you. Thanks very much. Thank you very much, David. Thank you. We are now going to take our last question. The questions come from the line of Aymeric Poulain from Kepler Cheuvreux. Please ask your question. Oh, thanks. Good morning. Thank you for taking my question. Also, most of the questions I had have been answered. Perhaps I can throw another one on the pricing effect and the level of inflation pass-through that you've had in the other division. And should we expect, at some point, next year or earlier than that, a reversal of such a pricing effect in your organic growth, please? Thank you. Good morning, Aymeric. So, nothing very specific to report on this, on this matter. So overall, I mean, you, you have seen that, inflation has had almost no impact on our defense and security business. Because, I mean, it's, as I mentioned several times, it's a business where, in general, we take advantage of, variation of price, mechanism in our, in our contract. So it goes up and down, but reflecting, I mean, how also our costs, are, are evolving, and I don't see, any specific matter on this point in the next, in 2024 and 2025. The issue, I commented on this matter, and specifically on the SIM card business, we are facing today some kind of reversal after quite a strong tailwind on this matter in 2022 and in the first half of 2023. But here again, I mean, as expected. Avionics is taking really advantage of the overall level of demands and no specific issue in term of inflations. And whether it goes up or down, I mean, I don't see any specific matters. Inflation decrease would be, of course, I mean, a positive news for our space business. As you know, it's, I mean, the only business where we've got a fixed and firm price mechanism on our backlog. And, of course, I mean, getting some relief on inflation would be, of course, positive, but I don't see that as a, I mean, as a key factor for 2024 in particular. Okay. Thank you. Okay. So I think that it was the last, the last questions. So, thank you very much for your attention. My belief is that, I mean, Q3, our Q3 figures are very much in line with our full year guidance from both an order intake and overall new standpoints. So here again, I mean, we reiterate our full year guidance for 2023. The next few weeks, we will be watching, in particular, in the U.S., also attending some conferences. So, hopefully, we'll have the opportunity to interact with you on those occasions. Our next release of results will be the annual result for 2023, that we release on March 5th next year. Thank you very much once again for your participations, and have a good day. Thank you again. Bye-bye. Thank you, ladies and gentlemen. If you didn't have a chance to ask a question on today's call, please do not hesitate to send your questions to the Thales Group Investor ir@thalesgroup.com, and we will get back to you as soon as possible. Thank you all for your participation. You may now disconnect your lines. Thank you.