Hensoldt (HAG) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 order intake of €701 million, up 6% year-over-year, driven by Eurofighter contracts and robust Optronics performance, with a record order backlog of €6.9 billion and a book-to-bill ratio of 1.8x.

• Revenue increased 20% to €395 million, with core revenue up 31% excluding pass-through, and growth in both ESG Group activities and the Optronics segment.

• Adjusted EBITDA margin was 7.6% (down from 10.2% in Q1 2024), reflecting product mix and temporary logistics ramp-up effects.

• Strategic partnership and investment in Quantum Systems to accelerate software-defined defense and expand into unmanned aerial platforms.

• Positioned to benefit from increased European and German defense budgets, with a pipeline expected to reach €55 billion by 2030 and a raised 2030 revenue ambition of €6 billion.

Financial highlights

• Order intake: €701 million (+6% YoY); core order intake +31% and organic +6%.

• Revenue: €395 million (+20% YoY); Optronics segment revenue up 45% in German business.

• Adjusted EBITDA: €30 million (margin 7.6%), down from €33 million (10.2%) in Q1 2024.

• Adjusted EBIT: €11 million, down from €33 million in Q1 2024; net income: -€31 million, impacted by higher interest and tax expenses.

• Free cash flow: -€107 million, reflecting seasonal working capital build and infrastructure investments.

Outlook and guidance

• Full-year 2025 guidance confirmed: revenue expected between €2.5–2.6 billion, adjusted EBITDA margin around 18–19%.

• Book-to-bill ratio targeted at 1.2x for 2025; net leverage target 1.5x; dividend payout ratio 30–40% of adjusted net income.

• Growth weighted toward H2 2025 as logistics transition enables ramp-up in Sensors.

• Midterm organic growth CAGR target raised to 15%, with revenue potential of €6 billion by 2030.

• Optronics segment order intake is forecasted to decline due to an unusually high prior year.