Hensoldt (HAG) Q3 2024 earnings summary

Executive summary

• All divisions achieved significant progress, with key milestones in the Pegasus program, Twinvis passive radar certification, and ASR-NG projects, as well as major contracts in radar and Optronics.

• Order intake reached €1,856 million, up 44.9% year-over-year, with a record order backlog of €6.5 billion, providing strong revenue visibility.

• ESG integration is on track, with all planned 2024 synergies confirmed and contributing as planned.

• Leadership changes included Oliver Dörre becoming CEO in April 2024 and the acquisition of ESG Group completed in April 2024.

• German Optronics business delivered strong Q3 performance, while Sensors segment saw robust growth.

Financial highlights

• Revenue increased by 21.3% to €1,377 million, driven by sensors, TRML-4D radar, and ESG Group's contribution.

• Adjusted EBITDA rose 24.1% to €187 million, with a margin of 13.6%; adjusted EBIT grew 18% to €111 million.

• Order backlog increased by over €1 billion to €6.5 billion as of September 30, 2024.

• Book-to-bill ratio improved to 1.3x, reflecting strong demand and backlog.

• Group net result was a loss of €48 million, impacted by special items and higher amortization.

Outlook and guidance

• Revenue for 2024 expected around €2.3 billion, with core revenue growth outpacing pass-through sales.

• Adjusted EBITDA margin before pass-through sales guided at 18–19%, expected at mid to upper end.

• Book-to-bill ratio guidance raised to 1.2x; net leverage target at or below 2.0x by year-end.

• 2025 and medium-term guidance confirmed: 10% average annual revenue growth, adjusted EBITDA margin >19%, and further deleveraging.

• Dividend payout ratio confirmed at 30–40% of adjusted net income.