2008 Employee Share Plan UK SHARE OFFER 25

2008 Employee Share Plan UK SHARE OFFER 25 TH FEBRUARY 2008 Human Resources

AGENDA 10. 30 Introduction Mike Seabrook 10. 35 UK Management Endorsement of Offer Kathy Jenkins 10. 45 Introduction of the Fifth Share Offer Rene Verot 11. 30 Coffee 12. 00 Presentation of 2008 All Employee Share Plan Offer in UK Questions and Answers 13. 00 Lunch 14. 00 Presentation of UK Tax Issues Mark Ife (Herbert Smith) 14. 30 Presentation of Share Plan Administration Rachel Jennings (HBOS) 15. 00 Quiz: Test Your Knowledge Mike Seabrook & Rene Verot 15. 45 Final Questions Human Resources 2 Rene Verot & Mike Seabrook

CONTENTS Thales strategy 2008 Offer In depth… In time… Human Resources 3

Continued growth performance Operating income in French norms IFO in IFRS norms 711 691 645 540 347 597 700 722 755 (in €M & % of revenues) * 381 5. 6% 5. 5% 6. 0% 6. 3% 5. 4% 6. 5% 6. 9% 6. 8% 7. 0% 7. 35% 7. 5% 1998 2003 2004 1999 2000 2001 2002 2004 2005 2006 * After exceptional provision of € 65 m In ten years: Operating margin has doubled Revenues have doubled (from 6 to 12€bn) Human Resources 4 2007 (est. )

The New Thales: a strong ambition 1 diagnosis Strong and sustained growth in security needs: ü An increasing global world where free circulation of goods and people is a reality 3 strategic axes 1 ambition § Dual technologies Consolidate a world leader in mission-critical information systems to meet demand § Multidomestic presence to be closer to stakeholders § Presence on the entire value chain ü A world facing new threats Human Resources 5 3 markets Aerospace 25% Defense 50% Security 25%

Thales’s profile World leader for mission-critical information systems n Three core and consistent businesses ü ü ü Aerospace Defense Security } More than € 12 bn annual revenues n Benefiting from the businesses acquired from Alcatel-Lucent and alliance with DCNS n A worldwide Group ü ü 68, 000 employees worldwide Presence in 50 countries Human Resources 6

Three strategic pillars n Presence all along the value chain ü ü From equipment and systems, to systems integration Prime contracting and service n Dual technologies ü ü n Multidomestic presence ü ü Long-term customer partnership Maximised local commercial opportunities Access to local skills and resources Meeting national security requirements Human Resources 7 Balanced portfolio between defence & civil businesses Optimised synergies

Three consistent businesses DEFENCE § § Air Systems Land Naval Joint Systems 50% § AEROSPACE SECURITY 25% § § § Onboard all major civil and military aerospace programmes § End-to-end space-based solutions from systems to services Human Resources 8 Ground transportation solutions Critical infrastructure security systems Enterprise services: defence and aerospace Simulation solutions and services

Defence: Thales at the centre of the game Highlights • FRES (Future Rapid Effect System) armoured vehicle programme in UK as SOSI • Joint Tactical Radio System (JTRS) programme in USA • Supply of Secure communication services to the ISAF in Afghanistan • Air defence protection system (Al Madhallah) for the Saudi Air Force • Integrated Modular Mast • CVF Aircraft Carriers in UK: design lead for the platform, power and propulsion Human Resources STAKES § Capability Enhancement and Force Transformation THALES’S ASSETS § “System of systems” global approach, Battlespace Transformation Center (BTC), Network Enabled Capabilities § Renewal of the product portfolio § Many strategic partnerships (Finmeccanica, Boeing, etc. ) § Strategic positioning in regards to the naval restructuring in Europe, with the strategic participation in DCNS § Success of the multidomestic approach 9

Aerospace: Thales now recognised as a major player Highlights • A 380: avionics, navigation, cockpit, electrical and cabin systems, and Full Flight Simulator • A 350 XWB: up to $2 bn in revenues over 20 years • Major successes IFE onboard A 380, B 787 and numerous airlines, notably in Asia • Regional transport aircraft: Sukhoi Superjet 100, ATR 600, etc. • 50% of ATM market share • Watchkeeper UAV STAKES § A very dynamic commercial market ü Major on-going programmes: A 350, A 380, B 787, Superjet 100 ü Growing ATM worldwide needs THALES’S ASSETS § Thales onboard all types of aircraft § Partnerships with Airbus, Boeing, etc. § Equipment for passengers comfort In-Flight Entertainment: 45% of the global market share ü Cabin lighting systems with Diehl Aerospace ü Next step: onboard connectivity ü § Leader in Air Traffic Management ü 50% of worldwide market § Strong investment in innovation ü Airlab dedicated to system networks definition and simulation § Key partner in military electronics for combat aircraft, mission systems and UAV ü Innovative solutions for surveillance mission, eg. Watchkeeper, Meltem Human Resources 10

Space: Thales has become a key reference Highlights • Telecom satellites: Indonesia, Norway, Emirates (Yahsat), Arab League countries (Arabsat) • GMES, European initiative to federate and rationalise Earth observation activities • Galileo: leadership position in at least two of the six segments of the programme: ground and systems • Exo. Mars scientific mission Human Resources STAKES § Implementation of major European programmes ü Redefining the business model for Galileo ü Launch of the GMES programme § Major Defence programmes ü Communications ü Observation (optics and radar) ü Electromagnetic intelligence THALES’S ASSETS § Global space solutions offer in partnership with Finmeccanica ü Systems through Thales Alenia Space (67% ownership) ü Services with Telespazio (33%) § European leader in satellite systems and services ü ü ü Commercial telecommunications Navigation Radar observation and optics Meteorology and oceanography Science Military communications and observation 11

Security: Growth opportunities for Thales Highlights • Worldwide successes in rail signalling and e-ticketing (main lines and urban lines) • ETCS (European train Control System): Lötschberg Base Tunnel • Secure solutions for civil administrations and critical infrastructures: • e-passport (France) • ID cards (Morroco) • safety and security systems for the international airports of Dubai and Doha • Finance: 50% of interbank transactions secured by Thales Human Resources STAKES § A market being structured due to the growing security demand ü Necessity to secure critical civil infrastructures… ü … in a global world exposed to new threats § 5 key development domains ü Transports (rail, road) ü Energy (production units, distribution network…) ü Health (management of medical data) ü Population influx (airport, borders, identity documents…) ü Financial transactions THALES’S ASSETS § Key positioning in ü Systems: rail signalling (#2 worldwide); metro; ticketing, airport security ü Equipments: Cryptology detection, localisation, simulators, payment terminals ü Services: management of critical infrastructures, training 12

Confidence in the future § Three consistent and well positioned areas of businesses § Organic growth and acquisition potential in each area § Strong commitment in innovation (up to 25% of our revenues) § Good financial health § Limited impact of the weak dollar thanks to a moderate exposure and a good anticipation and adaptation ability (Optimum plan) § Specific mission at the heart of the most critical issues of our world Human Resources 13

EMPLOYEE SHAREHOLDING POLICY 5 th share offer will be made to Thales employees in March 2008 Reminder of previous operations n 1998 : Privatisation (3 800 000 shares ; 2, 3% of Thales capital) n 2000 : Privatisation (2 800 000 shares ; 1, 6% of Thales capital) n 2002 : Issue of new shares (4 132 000 shares ; 2, 4% of Thales capital ) n 2004 : Sale of shares (607 000 shares ; 0, 4% of Thales capital) n 2007 : End of the lock-in period for the 2002 offer 2008 : sale of existing shares (no capital dilution) n Up to 3 500 000 shares ; ~ 1, 8% of Thales capital n If totally subscribed, this offer would result in 3, 8% of Thales capital owned by employees Human Resources 14

THALES CAPITAL BREAKDOWN – DEC 2007 2% - Employee shareholding 1. 48% - Thales 26. 56% - State 49, 13% - Floating 20. 80% - Alcatel Lucent Human Resources 15