Hensoldt (HAG) Q4 2025 earnings summary

Executive summary

• Delivered above FY 2025 guidance with record order intake, strong revenue growth, and transformative initiatives across all divisions.

• Order intake surged 62% to €5.7 billion, with a record order backlog of €8,833 million (+33% year-over-year), providing high visibility for future revenues.

• Adjusted EBITDA rose 12% year-over-year to €452 million (18.4% margin), and free cash flow reached €347 million, significantly above expectations.

• Strategic transformation, expanded industrial capacities, and partnerships are accelerating innovation and expanding the company’s role as a multi-domain system integrator.

• Strong operational execution amid a fundamentally changed geopolitical environment, with European defense budgets structurally higher and multi-year contracts in place.

Financial highlights

• Revenue increased to €2,455 million, up nearly 10% year-over-year; core revenue up 11%.

• Adjusted EBITDA reached €452 million (+12%), margin at 18.4%.

• Adjusted free cash flow up 39% to €347 million, with cash conversion exceeding 100% of adjusted EBITDA.

• Adjusted net income was €170 million; proposed dividend of €0.55 per share (+10%), payout ratio 37%.

• Net leverage remained stable at 1.6x, with net debt at €713 million, reflecting capacity expansion.

Outlook and guidance

• 2026 guidance: revenue ~€2,750 million, adjusted EBITDA margin 18.5–19%, book-to-bill 1.5–2.0x, and 30–40% dividend payout of adjusted net income.

• Adjusted free cash flow conversion expected at ~40% due to increased CapEx for infrastructure.

• Net leverage target for 2026 around 1.5x.

• Midterm targets: organic revenue growth of 15–20% annually, margin expansion by 50 bps per year, and normalized cash conversion of 50–60% from 2028.

• High order intake expected in 2026, with major contracts in both Sensors and Optronics segments.