HENSOLDT reports revenue growth and significantly higher order intake

The HENSOLDT Group (“HENSOLDT”) continued its positive business performance in the first nine months of the 2024 financial year. The company was able to further strengthen its position as a leading platform-independent European provider of seamlessly integrated defence solutions. In the first nine months of 2024, order intake increased to EUR 1,856 million (previous year: EUR 1,281 million). As a result, the order backlog has grown by almost one billion euros year-on-year to EUR 6,513 million (previous year: EUR 5,472 million euros).

Revenue for the first nine months increased by 21.3% to EUR 1,377 million (previous year: EUR 1,136 million). Adjusted EBITDA improved by 24.1% to EUR 187 million (previous year: EUR 151 million). This development was mainly driven by significant revenue growth in the core business as well as the first-time consolidation of the ESG Group. The adjusted EBITDA margin improved to 13.6% (previous year: 13.3%).

Oliver Dörre, CEO of the HENSOLDT Group, says: “The strong first nine months of 2024 underscore the positive development – particularly in the area of operational excellence – as well as the growth potential of HENSOLDT. After just 200 days we have largely completed the post-merger integration of ESG: central functions are fully integrated, and the relevant processes are implemented. This means that there is nothing to stop the full operational integration of ESG being completed at the turn of the year! We consistently expand HENSOLDT’s position as a reliable partner to our customers, both nationally and internationally, and we keep our promises.”

Christian Ladurner, CFO of the HENSOLDT Group, says: “The significant increase in revenues and the rise in adjusted EBITDA underline our operational strength in realizing economies of scale in our core business. We are particularly pleased with the strong order intakes, which once again significantly exceeded the previous year’s period. This success enabled us to specify the guidance of our book-to-bill ratio at the upper end of our expectations. HENSOLDT will continue to consistently pursue this profitable growth trajectory in the future.”

Continued strong development in order intake

With an order intake of EUR 1,865 million (previous year: EUR 1,281 million) in the first nine months of the current financial year, HENSOLDT was able to exceed the already high level of the previous year by 44.9%.

A key driver of this development was the strong performance of the Sensors segment. The main drivers were orders for the short-range and very short-range air defence system (Luftverteidigungssystem Nah- und Nächstbereichsschutz; LVS NNbS) commissioned for the German Bundeswehr. In addition, orders were received for further TRML-4D radars, firstly in support of Ukraine and secondly for Latvia and Slovenia as part of the European Sky Shield Initiative (ESSI).

The segment was able to conclude orders for Spexer radars for the Skyranger air defence system. From the second quarter of 2024, the order intake of the ESG Group amounting to EUR 305 million was included for the first time within the Sensors segment for six months. The largely integrated ESG Group has been managed as a separate division within the Sensors segment since the second quarter of 2024. The orders already include a successfully signed contract to provide logistics services to the German Bundeswehr (ZEBEL).

HENSOLDT has also been contracted to deliver radar systems for the Space Centre Australia. The contract includes the delivery of two high-performance Air Surveillance Radar – Next Generation systems (ASR-NG), along with a 20-year sustainment plan to bolster Australia’s critical air surveillance capabilities.

At the beginning of October, HENSOLDT entered into an agreement with Deutsche Flugsicherung GmbH (DFS; German air navigation service provider) to enable the use of the Twinvis passive radar for civil air traffic control.

In the Optronics segment, the order intake of EUR 297 million in the first nine months of the 2024 financial year was slightly below the strong order intake in the same period of the previous year. The first nine months of 2024 included in particular orders related to the Final Focus Metrology (FFM), orders for the laser rangefinder for the M1 Abrams main battle tank and an order related to the LVS NNbS project.

Continued strong development in revenue, earnings and free cash flow

Compared to the previous year, HENSOLDT’s revenues increased by 21.3% to EUR 1,377 million (previous year: EUR 1,136 million). Revenues contained significantly less pass-through business (revenue with a low value-added share) than in the first nine months of 2023. A major growth driver was the ESG Group, which has now been largely integrated and contributed EUR 172 million. At the same time, the core business – adjusted for the business activities of the ESG Group – grew by 10% compared to the prior-year period, particularly due to the TRML-4D radars.

The two major projects PEGASUS (airborne electronic signals intelligence system) and the Eurofighter radars developed as expected. Hence, the first flight of the PEGASUS aircraft in Wichita, USA; at the end of October, marked an important project milestone. With the modernization of the Norwegian ULA class submarines, HENSOLDT reached another milestone. The technical planning and execution were successfully validated in a critical design review in Bergen, Norway.

The adjusted EBITDA increased by 24.1% to EUR 187 million (previous year: EUR 151 million). This development mainly resulted from an increased revenue volume, corresponding economies of scale and the first-time inclusion of the ESG Group. At 13.6%, adjusted EBITDA margin was in line with expectations and on a par with the previous year (13.3%). The adjusted free cash flow of EUR -157 million was higher than in the same period of the previous year (EUR -162 million).

Outlook for the 2024 financial year confirmed – Book-to-bill ratio specified at upper end

For the 2024 financial year, HENSOLDT expects business to continue to develop positively and confirms its guidance. The Group continues to benefit from the high demand in Germany, Europe and NATO member states, as well as the continuing high international demand for defence solutions. For the current financial year, HENSOLDT expects consolidated revenues of approx. EUR 2.3 billion and a moderate increase in adjusted EBITDA with an adjusted EBITDA margin before revenues with a low value-added share of between 18% and 19%. In view of the high order backlog, HENSOLDT is specifying its forecast for the book-to-bill ratio at the upper end at around 1.2x (previously 1.1x – 1.2x).

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