Hensoldt (HAG) investor relations material

Strategic direction and market environment

• Ambition to reach €6 billion revenue by 2030, with a clear growth path beyond, reaffirmed and updated from previous guidance, focusing on scalable growth, software-defined defense, international expansion, and talent development.

• Plans to reduce presence in Eastern Europe, focusing on core European and international markets, with Germany and allies committing to 3.5% of GDP on defense, driving a European defense supercycle and immediate demand for readiness and modernization.

• Geopolitical instability, especially from Russia, Middle East, and Asia, is accelerating defense spending and procurement across Europe, with Germany leading and new NATO and EU initiatives boosting demand.

• German-led programs and European collaboration fuel international expansion, with strong political support and structural reforms expediting procurement and favoring domestic industry.

• Record order backlog and pipeline provide strong revenue visibility through 2028.

Operational and technological transformation

• Operations 2.0 strategy and plan implemented, including new logistics centers, Optronics site, and dedicated radar production, boosting scalability, resilience, and efficiency.

• Significant production capacity increases for key products, with new and modernized sites in Wetzlar and Oberkochen.

• Supply chain resilience enhanced through local sourcing (90% Germany, 95% Europe), strategic partnerships, multi-year contracts, and ongoing evaluation of vertical integration and M&A.

• IT backbone strengthened via S/4HANA and #oneSAPnow rollout, real-time data, and new infrastructure, supporting operational scale and efficiency.

• CAPEX elevated for site expansions, converging to normalized levels post-2028, with financial discipline maintained and CapEx at ~3% of revenue, plus a one-time €80 million investment in 2026.

Software-defined defense and innovation

• Transitioning from hardware-centric to software- and data-centric, high-margin recurring revenue streams, with SDD and MDO Core central to future growth.

• Ceritron and Elysion systems exemplify the shift from hardware to software-enabled solutions, generating recurring license revenues and scalable value.

• By 2030, software-defined defense expected to contribute around 8% of total revenue, with ongoing R&D investments (5-6% of revenue) focused on digital and AI-driven capabilities.

• Strategic R&D investments in SDD unlock substantial program revenue and long-term scalability, with SaaS and digital mission enablement in development.

• Partnerships and targeted M&A drive digitalization, production capability, and internationalization, supporting innovation and market access.